LENDING
GUIDELINES
MANUAL
Effective 13 June 2024
Credit Policy and
Process Guidelines
Table of
Contents
/ 2Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
How to read the Credit Guidelines
Booklet 3
Responsible Lending Obligations 3
Customer Identification Requirements 5
Loan Purposes 6
Eligible Applicants – new lending 6
Eligible Applicants – variations to existing
lending 6
Co-Borrower Benefit 6
Guarantees 8
Acceptable Residential Security Properties 8
Unacceptable Residential Security Properties 11
Valuations 11
Lenders Mortgage Insurance (LMI) 14
Application Details and Verification 14
Verification Document Criteria 15
Employment Income 15
Permanent Full Time/Part Time Income 16
Allowances 16
Deductions 16
HECS/HELP Debt Deductions 17
Returning to Work 17
Parental Leave 17
Casual Income, PAYG Contract & Tax-Free
Defence Force Reserves 17
Uncertain Employment Income 17
Non-Employment Income Shadings 18
Australian Rental Income 18
Australian Government Allowances 19
Child Support or Maintenance 20
Investment Income 20
Privately Listed Income – Companies
& Trusts 20
Superannuation Income 20
Foreign Source Income 20
Defence Home Ownership Subsidy 20
Self Employed (Personal, Partnerships,
Company, Trust) 21
Acceptable Types of Financial Statements
(Self Employed Income) 21
General Living and Entertainment
Expenses (GLEE) 22
Loan Purpose/Cash Out 22
Loan Repayments 23
Home Loan Repayment Verification 24
Refinanced Liability Verification 24
Undisclosed Liabilities 24
Unacceptable Behaviours 24
Genuine Contributions (Genuine Savings) 25
First Home Owners Grant (FHOG) Policy 26
Vacant Land Loans 26
Construction Loans 26
Procedure and Documentation 28
Acceptance of Electronic Signature for
Supporting Documents 28
Customer Acceptance 29
Loan Variations (Broker Guidelines) 29
Contents
/ 2Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
How to read the Credit Guidelines
Booklet 3
Responsible Lending Obligations 3
Customer Identification Requirements 5
Loan Purposes 6
Eligible Applicants – new lending 6
Eligible Applicants – variations to existing
lending 6
Co-Borrower Benefit 6
Guarantees 8
Acceptable Residential Security Properties 8
Unacceptable Residential Security Properties 11
Valuations 11
Lenders Mortgage Insurance (LMI) 14
Application Details and Verification 14
Verification Document Criteria 15
Employment Income 15
Permanent Full Time/Part Time Income 16
Allowances 16
Deductions 16
HECS/HELP Debt Deductions 17
Returning to Work 17
Parental Leave 17
Casual Income, PAYG Contract & Tax-Free
Defence Force Reserves 17
Uncertain Employment Income 17
Non-Employment Income Shadings 18
Australian Rental Income 18
Australian Government Allowances 19
Child Support or Maintenance 20
Investment Income 20
Privately Listed Income – Companies
& Trusts 20
Superannuation Income 20
Foreign Source Income 20
Defence Home Ownership Subsidy 20
Self Employed (Personal, Partnerships,
Company, Trust) 21
Acceptable Types of Financial Statements
(Self Employed Income) 21
General Living and Entertainment
Expenses (GLEE) 22
Loan Purpose/Cash Out 22
Loan Repayments 23
Home Loan Repayment Verification 24
Refinanced Liability Verification 24
Undisclosed Liabilities 24
Unacceptable Behaviours 24
Genuine Contributions (Genuine Savings) 25
First Home Owners Grant (FHOG) Policy 26
Vacant Land Loans 26
Construction Loans 26
Procedure and Documentation 28
Acceptance of Electronic Signature for
Supporting Documents 28
Customer Acceptance 29
Loan Variations (Broker Guidelines) 29
How to read
the Credit
Guidelines
Booklet
/ 3Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Advantedge Loan Provision Policy
Loan provisions listed here apply to all
lending under Advantedge Financial Services
Residential Lending Program. These provisions
must be adhered to for a loan to be funded
by AFSH Nominees Pty Ltd ACN 143 937 437
Australian Credit Licence 391192 (Advantedge).
LMI Insurer Requirements
QBE has delegated to Advantedge the
authority to approve LMI Cover on all
mortgage or variation of a mortgage
applications, that comply with the standard
credit assessment and approval standards.
Applications must be processed through the
loan approvals systems or by an Accredited
Assessor who holds a Delegated Credit
Authority. If any applications don’t meet the
Delegated Underwriting Authority (DUA)
criteria held by Advantedge, the loan must
meet the specific LMI provisions outlined by
the LMI insurer and be approved by the LMI
insurer. These provisions are in addition to any
provision outlined for a loan to be funded by
Advantedge. Full details of the LMI Provider
policies can be obtained from their websites:
• QBE – https://www.qbelmi.com
(then click on“lmiGUIDE”)
Note: Genworth is an approved LMI Provider
however there is no DUA agreement held with
Genworth.
If you are unsure of a particular credit
guideline please contact your BDM.
Responsible Lending
Obligations
Your responsible lending obligations require
you to make reasonable inquiries about the
customer(s) objectives, financial situation and
requirements including taking reasonable steps
to verify their information. You must make
an assessment that a particular loan with a
particular credit provider is not unsuitable for
the client.
In particular (although not limited to) ensure
inquiry is made about:
• The customer’s purpose(s) for the loan
• The customer’s income
• The customer’s general living and
entertainment expenses
• The source of the customer’s deposit (initial
or current) and if it includes repayable non-
genuine savings (such as an advance/gift
from family or friends that must be repaid)
• The customers liabilities and debt
repayments, including any repayable non-
genuine savings (i.e.: loan funded deposit
from family/friends)
• Whether the customer has experienced
any previous form of financial hardship /
hardship (eg: missed loan repayments),
particularly within the past two years
• Whether the customer expects there
will be a change in their future financial
circumstances (eg: employment, income,
expenses) over the next 12 months that
will make it difficult to meet their financial
commitments.
Where the loan is NCCP regulated (where it is
for personal, domestic, or household purposes,
to purchase residential property, or a refinance
of a contract for one of these purposes),
you must not provide credit assistance if the
consumer could not meet their obligations or
could do so only with substantial hardship.
It is your responsibility under the responsible
lending obligations of NCCP to verify the
financial situation of the applicant as well as
establishing whether the applicant can meet
their obligations without substantial hardship.
Repayment at Retirement
As part of lending responsibly, you must:
• Capture and record an applicant’s intended
retirement strategy, where the loan will
expire after their planned retirement age, or
after they turn 70 years of age; and,
• If retirement is imminent*:
– Complete and pass the retirement
strategy test (refer page 6); and,
– Verify retirement strategy
Note: Retirement is considered imminent
where a customer is aged 55 years or
greater at the application submission date, or
if they plan to retire within the next 10 years.
The above requirements are not applicable
where the customer:
• Has already retired and can currently
demonstrate serviceability solely from
non-employment income (e.g.: income from
investments, superannuation); or
• Is a non-individual or the home loan is
confirmed to be unregulated.
Imminent Retirement
Where a customer is aged 55 years or
greater, at the application submission date;
or if they plan to retire within the next 10
years, the applicant will be considered under
Imminent Retirement. Brokers will be
required to select one of two acceptable
retirement strategies from the table on page 4.
Brokers will also be required to document the
outcome, including calculations, to evidence
how the test was deemed ‘reasonable and
appropriate’ for the customers circumstances.
the Credit
Guidelines
Booklet
/ 3Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Advantedge Loan Provision Policy
Loan provisions listed here apply to all
lending under Advantedge Financial Services
Residential Lending Program. These provisions
must be adhered to for a loan to be funded
by AFSH Nominees Pty Ltd ACN 143 937 437
Australian Credit Licence 391192 (Advantedge).
LMI Insurer Requirements
QBE has delegated to Advantedge the
authority to approve LMI Cover on all
mortgage or variation of a mortgage
applications, that comply with the standard
credit assessment and approval standards.
Applications must be processed through the
loan approvals systems or by an Accredited
Assessor who holds a Delegated Credit
Authority. If any applications don’t meet the
Delegated Underwriting Authority (DUA)
criteria held by Advantedge, the loan must
meet the specific LMI provisions outlined by
the LMI insurer and be approved by the LMI
insurer. These provisions are in addition to any
provision outlined for a loan to be funded by
Advantedge. Full details of the LMI Provider
policies can be obtained from their websites:
• QBE – https://www.qbelmi.com
(then click on“lmiGUIDE”)
Note: Genworth is an approved LMI Provider
however there is no DUA agreement held with
Genworth.
If you are unsure of a particular credit
guideline please contact your BDM.
Responsible Lending
Obligations
Your responsible lending obligations require
you to make reasonable inquiries about the
customer(s) objectives, financial situation and
requirements including taking reasonable steps
to verify their information. You must make
an assessment that a particular loan with a
particular credit provider is not unsuitable for
the client.
In particular (although not limited to) ensure
inquiry is made about:
• The customer’s purpose(s) for the loan
• The customer’s income
• The customer’s general living and
entertainment expenses
• The source of the customer’s deposit (initial
or current) and if it includes repayable non-
genuine savings (such as an advance/gift
from family or friends that must be repaid)
• The customers liabilities and debt
repayments, including any repayable non-
genuine savings (i.e.: loan funded deposit
from family/friends)
• Whether the customer has experienced
any previous form of financial hardship /
hardship (eg: missed loan repayments),
particularly within the past two years
• Whether the customer expects there
will be a change in their future financial
circumstances (eg: employment, income,
expenses) over the next 12 months that
will make it difficult to meet their financial
commitments.
Where the loan is NCCP regulated (where it is
for personal, domestic, or household purposes,
to purchase residential property, or a refinance
of a contract for one of these purposes),
you must not provide credit assistance if the
consumer could not meet their obligations or
could do so only with substantial hardship.
It is your responsibility under the responsible
lending obligations of NCCP to verify the
financial situation of the applicant as well as
establishing whether the applicant can meet
their obligations without substantial hardship.
Repayment at Retirement
As part of lending responsibly, you must:
• Capture and record an applicant’s intended
retirement strategy, where the loan will
expire after their planned retirement age, or
after they turn 70 years of age; and,
• If retirement is imminent*:
– Complete and pass the retirement
strategy test (refer page 6); and,
– Verify retirement strategy
Note: Retirement is considered imminent
where a customer is aged 55 years or
greater at the application submission date, or
if they plan to retire within the next 10 years.
The above requirements are not applicable
where the customer:
• Has already retired and can currently
demonstrate serviceability solely from
non-employment income (e.g.: income from
investments, superannuation); or
• Is a non-individual or the home loan is
confirmed to be unregulated.
Imminent Retirement
Where a customer is aged 55 years or
greater, at the application submission date;
or if they plan to retire within the next 10
years, the applicant will be considered under
Imminent Retirement. Brokers will be
required to select one of two acceptable
retirement strategies from the table on page 4.
Brokers will also be required to document the
outcome, including calculations, to evidence
how the test was deemed ‘reasonable and
appropriate’ for the customers circumstances.
/ 4Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
CUSTOMER ADVISED
RETIREMENT STRATEGY
RETIREMENT STRATEGY TEST APPLICATION OF TEST
• Sale of asset(s)
• Use of savings
• Lump sum from superannuation
• Income from superannuation,
• income from other investments
Financial Assets to Home Loan limits
Verify financial assets (1) (2) that are a minimum
of 100% of the total home loan limit/s as at
application drawdown.
Note: where the joint assets test is used and
a deal is submitted through ApplyOnline or
LoanApp, the broker will need to lodge this via the
exception section in the lodgement system. This
exception section is available once all 3 tests have
been failed (i.e. after the downsize option in the
lodgement systems.)
The intention of this test is to demonstrate that the
customer has already built up sufficient financial
assets to be able to repay the future home loan debt
at retirement.
If assets are jointly owned by a customer and
another applicant/s, use the total value owned by
the applicants.
Customers may nominate financial assets solely owned
by their spouse / defacto who is also a co- applicant to
the loan.
Where a home loan is in joint names, the total of the
home loan limit should be included in the calculation of
each applicant’s test, not just the customer’s share.
Brokers do not need to verify assets in excess of
the loan limit/s, examples of acceptable verification
documents are listed below.
• Downsize owner occupied
property
Downsize Owner Occupied Property
Have a minimum of $200,000 of equity in their
owner-occupied property and/or verified financial
assets (1) (2)
.
– Equity is calculated by taking the current verified
property market value less the home loan limit/s at
drawdown
If there is a shortfall, they must have verified
financial assets (1) (2) that are a minimum of 100% of
the shortfall.
The intention of this test is for the customer to
demonstrate that they will have sufficient equity
(minimum $200,000) in their home at retirement to
buy a downsize property.
If assets are jointly owned by a customer and
another applicant/s, use the total value owned by the
applicants.
Customers may nominate an owner-occupied property
solely owned by their spouse / defacto who is also a
co-applicant to the loan.
Where a home loan is in joint names, the total of the
home loan limit should be included in the calculation of
each applicant’s test, not just the customer’s share.
If the customer/s do not have sufficient equity in
their home to pass the test, the financial asset test
may be used to demonstrate they have a minimum of
$200,000 in equity and assets combined.
Examples of acceptable verification documents are
listed below.
(1) Financial assets can include savings, investment properties, shares (2)
, managed funds, superannuation and net asset value of company, business, trust entity but excludes assets being used as a
contribution towards the purchase, owner occupied property (principle place of residence), vehicles, household goods and other personal assets.
(2) Shares secured by a margin lending facility cannot be used to verify financial assets. They must not be input into Advantedge origination systems as part of strategy test. DCA holders can consider using
any remaining equity where documentary evidence is held confirming both the value of shares and linked margin lending facility.
Acceptable Verification Documents:
Current Property Value • The most recent valuation held (regardless of age)
• Most recent Rates notice (to show ownership and displaying value)
• Most recent rate notice or title search (to show ownership) + Property Profile Report (to show value. Note
we will accept any value nominated within the range shown on the property profile report)
Financial Assets • Bank account statement/term deposit certificate
• Share statements / online trading account statements (2) ; or
• The most recently issued superannuation statement
• A letter from a financial planner which states the balance of the customer’s super fund; or
• Financial statements (e.g. SMSF, Company/Business, Trust); or
• Copy of non-listed company or business balance sheet that the customer(s) holds an interest in, which
shows the entity net asset/equity value. If required, unpaid shareholders/loan liability account(s) can be
considered. (Note: value attributed, should align with customer’s entitlement i.e.: % of ownership.)
• Beneficial ownership of a trust where customer is (a) a trustee who controls the distributions from a trust to
beneficiaries or (b) a named trust beneficiary who receives trust income distribution/s
– obtain the schedule of beneficiaries in the trust deed to confirm if the customer is a beneficiary of the
trust and /or the trustee of the trust
– obtain the balance sheet of the trust. If required, unpaid beneficiaries/loan liability account(s) can be
considered. (Note: value attributed, should align with customer’s entitlement i.e.: % of ownership)
Where the above table requirements cannot be met, any document/s which verify the ownership and value of asset held, in line with ‘Verification
Document Criteria’ (refer page 15) section are also acceptable.
Lending Guidelines Manual
CUSTOMER ADVISED
RETIREMENT STRATEGY
RETIREMENT STRATEGY TEST APPLICATION OF TEST
• Sale of asset(s)
• Use of savings
• Lump sum from superannuation
• Income from superannuation,
• income from other investments
Financial Assets to Home Loan limits
Verify financial assets (1) (2) that are a minimum
of 100% of the total home loan limit/s as at
application drawdown.
Note: where the joint assets test is used and
a deal is submitted through ApplyOnline or
LoanApp, the broker will need to lodge this via the
exception section in the lodgement system. This
exception section is available once all 3 tests have
been failed (i.e. after the downsize option in the
lodgement systems.)
The intention of this test is to demonstrate that the
customer has already built up sufficient financial
assets to be able to repay the future home loan debt
at retirement.
If assets are jointly owned by a customer and
another applicant/s, use the total value owned by
the applicants.
Customers may nominate financial assets solely owned
by their spouse / defacto who is also a co- applicant to
the loan.
Where a home loan is in joint names, the total of the
home loan limit should be included in the calculation of
each applicant’s test, not just the customer’s share.
Brokers do not need to verify assets in excess of
the loan limit/s, examples of acceptable verification
documents are listed below.
• Downsize owner occupied
property
Downsize Owner Occupied Property
Have a minimum of $200,000 of equity in their
owner-occupied property and/or verified financial
assets (1) (2)
.
– Equity is calculated by taking the current verified
property market value less the home loan limit/s at
drawdown
If there is a shortfall, they must have verified
financial assets (1) (2) that are a minimum of 100% of
the shortfall.
The intention of this test is for the customer to
demonstrate that they will have sufficient equity
(minimum $200,000) in their home at retirement to
buy a downsize property.
If assets are jointly owned by a customer and
another applicant/s, use the total value owned by the
applicants.
Customers may nominate an owner-occupied property
solely owned by their spouse / defacto who is also a
co-applicant to the loan.
Where a home loan is in joint names, the total of the
home loan limit should be included in the calculation of
each applicant’s test, not just the customer’s share.
If the customer/s do not have sufficient equity in
their home to pass the test, the financial asset test
may be used to demonstrate they have a minimum of
$200,000 in equity and assets combined.
Examples of acceptable verification documents are
listed below.
(1) Financial assets can include savings, investment properties, shares (2)
, managed funds, superannuation and net asset value of company, business, trust entity but excludes assets being used as a
contribution towards the purchase, owner occupied property (principle place of residence), vehicles, household goods and other personal assets.
(2) Shares secured by a margin lending facility cannot be used to verify financial assets. They must not be input into Advantedge origination systems as part of strategy test. DCA holders can consider using
any remaining equity where documentary evidence is held confirming both the value of shares and linked margin lending facility.
Acceptable Verification Documents:
Current Property Value • The most recent valuation held (regardless of age)
• Most recent Rates notice (to show ownership and displaying value)
• Most recent rate notice or title search (to show ownership) + Property Profile Report (to show value. Note
we will accept any value nominated within the range shown on the property profile report)
Financial Assets • Bank account statement/term deposit certificate
• Share statements / online trading account statements (2) ; or
• The most recently issued superannuation statement
• A letter from a financial planner which states the balance of the customer’s super fund; or
• Financial statements (e.g. SMSF, Company/Business, Trust); or
• Copy of non-listed company or business balance sheet that the customer(s) holds an interest in, which
shows the entity net asset/equity value. If required, unpaid shareholders/loan liability account(s) can be
considered. (Note: value attributed, should align with customer’s entitlement i.e.: % of ownership.)
• Beneficial ownership of a trust where customer is (a) a trustee who controls the distributions from a trust to
beneficiaries or (b) a named trust beneficiary who receives trust income distribution/s
– obtain the schedule of beneficiaries in the trust deed to confirm if the customer is a beneficiary of the
trust and /or the trustee of the trust
– obtain the balance sheet of the trust. If required, unpaid beneficiaries/loan liability account(s) can be
considered. (Note: value attributed, should align with customer’s entitlement i.e.: % of ownership)
Where the above table requirements cannot be met, any document/s which verify the ownership and value of asset held, in line with ‘Verification
Document Criteria’ (refer page 15) section are also acceptable.
/ 5Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Non-Imminent Retirement
Where a customer’s loan will expire after their planned retirement age, or after they turn 70 years of age, and they are not considered ‘Imminent’ as
above, brokers will be required to select one (or more) of seven acceptable retirement strategies from the following:
Customer advised
Retirement Strategy
• Co-applicant income
• Sale of asset(s) (excluding owner occupied home & household goods)
• Use of savings (excluding contribution towards the purchase)
• Lump sum from superannuation
• Income from superannuation
• Income from other investments
• Downsize owner occupied property.
Customer Identification Requirements
Who needs to have their identification
verified?
A Customer’s identity needs to be verified
to meet both Know Your Customer (KYC)
requirements administered by the Australian
Transaction Reports and Analysis Centre
(AUSTRAC), and Verification of Identity
(VOI) requirements administered by the Land
Titles Office in each jurisdiction. Customer
photographic identification (ID) must be
sighted, collected and verified for:
• New Customers
• Verification of Identity for existing
Customers, where an application requires a
new mortgage
• Connected Parties – Individuals such as
Power Of Attorney/Account Authorities,
that have permission to act on behalf of the
customer
• Customers who have changed their name
(e.g. due to marriage), where an application
is in relation to an existing mortgage
Where the Borrower is a Company, all
Directors will be required to complete the
identification checks.
Note: From 25 May 2020, Advantedge does
not accept new loan applications where the
Borrower is a Company.
How to verify a Customer’s identity
One of the following methods can be used to
complete VOI and KYC:
1. In-person verification of identity
(if met Customer and sighted their original
ID document/s in-person).
2. IDyou ‘In person’ Report (if met
Customer and sighted their original ID
document/s in-person)
3. IDyou ‘Remote’ Report (if met Customer
and sighted their ID document/s remotely
e.g. via video conference and captured
using IDYou remote)
4. Australia Post
How to verify a Connected Parties’
identity
A connected party can only be identified via
Australia Post.
Identity documents to be produced
The Customer is required to provide:
• For an in-person interview or IDYou
including Remote(selecting the Advantedge
option), only 1 photographic ID from the
below list.
• For all other VOI and KYC methods
(i.e., Australia Post), minimum
2 forms of ID, one being a photographic ID
from the below list.
• The ID must show the Customer’s full legal
name and either their date of birth or
current residential address.
The following primary photographic ID
documents are acceptable:
• Australian Passport (acceptable if expired
within the last 2 years)
• Australian Driver’s License (must not be
expired and digital license not acceptable)
• Foreign Passport (must not be expired)
• Proof of Age Card (must be government
issued; must not be expired; if no expiry
date present, then must be less than 10
years from date of issue)
Note [1]: The Australian Passport is preferred,
as in most instances it will contain the full
legal name of the Customer.
Note [2]: State based Australian Driver’s
Licences may not contain full legal names and
may delay processing. If the Customer has a
middle name, a driver’s licence showing only
a middle initial will be accepted, but a driver’s
licence without a middle initial will require
additional ID to confirm their middle name.
Additional Identification
You, as a Broker may collect additional
identification documents to resolve a
discrepancy if:
• Customer cannot produce a photographic
ID document which reflects their full legal
name. Examples of acceptable primary
non-photographic identification documents
include:
– Birth Certificate
– Citizenship Certificate
– Concession Card
• Customer’s primary photographic ID
does not validate their date of birth or
current residential address. Examples of
acceptable non-photographic identification
documents include:
– Birth Certificate
– Government issues utility bill issued in the
last 3 months
– Concession Card
The Broker’s responsibilities
You, as a Broker, must:
• sight original photographic ID from the
list above (and any secondary ID required)
either in-person or remotely using one of
the approved options.
• validate that the documentation appears
authentic
• conduct a face-to-face interview (either
in person, or remotely if using IDYou) to
confirm the person is of a reasonable
likeness to the photograph contained in the
ID document
• retain and submit a copy with the
application submission of the ID
document/s sighted or captured when
validating the Customer’s identity.
• provide a digital attestation certifying
that the ID submitted is a true copy of the
original, that you’re satisfied the Customer
who you interviewed is a reasonable
likeness to the photo in the ID document,
and confirming you have followed
instructions set out by Advantedge.
Note: Where a Customer is identified by
Australia Post, the above steps do not apply,
but you must confirm Australia Post has
completed VOI and KYC via submission notes
to Advantedge.
You must undertake further steps to validate
the Customer’s identity if you know, or
reasonably suspect that:
• the ID is not genuine.
• the photo in the ID is not a reasonable
likeness of the Customer.
• the Customer does not appear to be the
person to which the ID relates.
• in any other circumstances you consider
appropriate.
• the ID contains a name discrepancy or
doesn’t reflect the Customer’s full legal
name. Should you not be able to resolve
your concerns, pause your application and
contact your BDM.
Lending Guidelines Manual
Non-Imminent Retirement
Where a customer’s loan will expire after their planned retirement age, or after they turn 70 years of age, and they are not considered ‘Imminent’ as
above, brokers will be required to select one (or more) of seven acceptable retirement strategies from the following:
Customer advised
Retirement Strategy
• Co-applicant income
• Sale of asset(s) (excluding owner occupied home & household goods)
• Use of savings (excluding contribution towards the purchase)
• Lump sum from superannuation
• Income from superannuation
• Income from other investments
• Downsize owner occupied property.
Customer Identification Requirements
Who needs to have their identification
verified?
A Customer’s identity needs to be verified
to meet both Know Your Customer (KYC)
requirements administered by the Australian
Transaction Reports and Analysis Centre
(AUSTRAC), and Verification of Identity
(VOI) requirements administered by the Land
Titles Office in each jurisdiction. Customer
photographic identification (ID) must be
sighted, collected and verified for:
• New Customers
• Verification of Identity for existing
Customers, where an application requires a
new mortgage
• Connected Parties – Individuals such as
Power Of Attorney/Account Authorities,
that have permission to act on behalf of the
customer
• Customers who have changed their name
(e.g. due to marriage), where an application
is in relation to an existing mortgage
Where the Borrower is a Company, all
Directors will be required to complete the
identification checks.
Note: From 25 May 2020, Advantedge does
not accept new loan applications where the
Borrower is a Company.
How to verify a Customer’s identity
One of the following methods can be used to
complete VOI and KYC:
1. In-person verification of identity
(if met Customer and sighted their original
ID document/s in-person).
2. IDyou ‘In person’ Report (if met
Customer and sighted their original ID
document/s in-person)
3. IDyou ‘Remote’ Report (if met Customer
and sighted their ID document/s remotely
e.g. via video conference and captured
using IDYou remote)
4. Australia Post
How to verify a Connected Parties’
identity
A connected party can only be identified via
Australia Post.
Identity documents to be produced
The Customer is required to provide:
• For an in-person interview or IDYou
including Remote(selecting the Advantedge
option), only 1 photographic ID from the
below list.
• For all other VOI and KYC methods
(i.e., Australia Post), minimum
2 forms of ID, one being a photographic ID
from the below list.
• The ID must show the Customer’s full legal
name and either their date of birth or
current residential address.
The following primary photographic ID
documents are acceptable:
• Australian Passport (acceptable if expired
within the last 2 years)
• Australian Driver’s License (must not be
expired and digital license not acceptable)
• Foreign Passport (must not be expired)
• Proof of Age Card (must be government
issued; must not be expired; if no expiry
date present, then must be less than 10
years from date of issue)
Note [1]: The Australian Passport is preferred,
as in most instances it will contain the full
legal name of the Customer.
Note [2]: State based Australian Driver’s
Licences may not contain full legal names and
may delay processing. If the Customer has a
middle name, a driver’s licence showing only
a middle initial will be accepted, but a driver’s
licence without a middle initial will require
additional ID to confirm their middle name.
Additional Identification
You, as a Broker may collect additional
identification documents to resolve a
discrepancy if:
• Customer cannot produce a photographic
ID document which reflects their full legal
name. Examples of acceptable primary
non-photographic identification documents
include:
– Birth Certificate
– Citizenship Certificate
– Concession Card
• Customer’s primary photographic ID
does not validate their date of birth or
current residential address. Examples of
acceptable non-photographic identification
documents include:
– Birth Certificate
– Government issues utility bill issued in the
last 3 months
– Concession Card
The Broker’s responsibilities
You, as a Broker, must:
• sight original photographic ID from the
list above (and any secondary ID required)
either in-person or remotely using one of
the approved options.
• validate that the documentation appears
authentic
• conduct a face-to-face interview (either
in person, or remotely if using IDYou) to
confirm the person is of a reasonable
likeness to the photograph contained in the
ID document
• retain and submit a copy with the
application submission of the ID
document/s sighted or captured when
validating the Customer’s identity.
• provide a digital attestation certifying
that the ID submitted is a true copy of the
original, that you’re satisfied the Customer
who you interviewed is a reasonable
likeness to the photo in the ID document,
and confirming you have followed
instructions set out by Advantedge.
Note: Where a Customer is identified by
Australia Post, the above steps do not apply,
but you must confirm Australia Post has
completed VOI and KYC via submission notes
to Advantedge.
You must undertake further steps to validate
the Customer’s identity if you know, or
reasonably suspect that:
• the ID is not genuine.
• the photo in the ID is not a reasonable
likeness of the Customer.
• the Customer does not appear to be the
person to which the ID relates.
• in any other circumstances you consider
appropriate.
• the ID contains a name discrepancy or
doesn’t reflect the Customer’s full legal
name. Should you not be able to resolve
your concerns, pause your application and
contact your BDM.
/ 6Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Discrepancy management
Where Advantedge identifies discrepancies in
the Customer’s name on their ID documents
and other sources of Customer information
(e.g. their application, their contract of sale,
their certificate of title, the Transfer of Land
form and so on), Advantedge will take one or
more of the following actions to be reasonably
satisfied that the Customer is who they say
they are:
• seek additional information or clarification
from the Broker, including requesting
further identification documents
(i.e. a marriage certificate);
• verify the additional information /
clarification received from the Broker/
Customer.
Loan Purposes
Lending must be for personal and personal
investment purposes only. The loan must not
fund business purposes including:
• Loans for business purposes or the
refinancing of business loans (unless the
business has ceased trading).
• Loans for the purchase of a business and/or
goodwill (including investment in a business
owned by a related or associated entity to
the borrower).
• Loans for any type or investment for
property development purposes, that relies
on the completion of the development to
service the facility.
Eligible Applicants –
new lending
Borrower Residency
Borrowers and mortgagors must be one of
the following AND reside in Australia:
1. Australian citizen;
2. Australian Permanent Resident; or
3. NZ Citizen.
Note:
Individuals who hold a Partner / Spousal
Resident Visa (eg: Subclass 309, 820) are
permitted, on the basis that a joint application
is submitted with one of the above defined
eligible borrowers, subject to the lending being
up to a maximum LVR of 70%.
Eligible Applicants –
variations to existing
lending
Borrower Residency
Borrowers, mortgagors, and guarantors
must be one of the following AND reside in
Australia:
1. Australian citizen;
2. Australian Permanent Resident; or
3. NZ Citizen.
Note:
Individuals who hold a Partner / Spousal
Resident Visa (eg: Subclass 309, 820) are
permitted, on the basis that a joint application
is submitted with one of the above defined
eligible borrowers, subject to the lending being
up to a maximum LVR of 70%.
Corporate Entities
1. Registered Australian companies and
subject to company taxation;
2. Trustee companies acting on behalf
of trusts.
For company applicants:
1. All Directors/Trustees/Partners must be
Australian citizens/Permanent Residents/NZ
Citizens AND reside in Australia;
2. Guarantees from company directors are
required; and
3. Companies must not be in the process of
deregistering, winding up or voluntary
administration.
Advantedge will not accept any loan
applications for new lending purposes from
companies, trustee companies and individual
trustees unless it is by way of a variation of
an existing such loan, including construction
on vacant land/renovations to residential
property security.
Co-Borrower Benefit
Purpose
The following policy ensures compliance with
the Banking Code of Practice and is intended
to ensure all co-borrowers on a loan facility
receive a Substantial Benefit from the loan
proceeds and helps to protect vulnerable
members of our society from financial abuse.
Substantial Benefit
An Individual can only be accepted as a
co-borrower where it can be evidenced that
they receive a ‘Substantial Benefit’ from the
loan proceeds, unless they are spouses or de
factos where special eligibility requirements
must be met.
For new home loans and increases involving
joint applicants, brokers must identify whether
each individual co-borrower will receive a
substantial benefit.
This is not required for company borrowers or
individual borrowers, for the purposes of loan
variations, who are:
• acting in their capacity as trustee;
• directors of co-borrower companies;
• partners in a partnership;
• in a joint venture arrangement.
A ‘Substantial Benefit’ includes where each
co-borrower:
• acquires a reasonably proportionate legal or
equitable interest in assets purchased with
the loan funds; or
• utilises a reasonable portion of the
loans funds to repay their debts or other
obligations owed by the co-borrower; or
• will utilise and have access to a reasonable
portion of the loan funds which is not
covered above (for example, a holiday,
medical expenses, household goods, etc)
The minimum percentage required for each
co-borrower to achieve ‘Substantial Benefit’ is
set out below:
NUMBER OF
INDIVIDUAL
CO-BORROWERS
MINIMUM
AMOUNT DEEMED
‘SUBSTANTIAL
BENEFIT’
2 to 4 Minimum 25%
5 or more Equal share
Structuring Options
In cases where a Substantial Benefit cannot be
demonstrated, brokers must discuss with the
proposed co-borrower:
• why they want to be a co-borrower; and
• alternative structuring options with another
mortgage provider such as providing a
security guarantee or, subject to meeting
credit policy requirements, becoming a
servicing guarantor.
The customer needs to understand the risks
associated with entering into the loan and
understand the difference between being a
co-borrower and a guarantor. You must tell
the customer to obtain independent legal and
financial advice before we accept an individual
without Substantial Benefit as a co-borrower.
Customers’ obligations are different between
being a guarantor and being a co-borrower.
Brokers must not suggest a customer who
wants to be a guarantor to be a co-borrower.
You must explain that:
• Advantedge no longer accepts guarantees;
• where there is more than one customer
involved with a loan, Advantedge only
accepts co- borrowers where they have
substantial benefit from the loan unless
they are spouses or de factos;
• for spouses and de factos without
substantial benefit there are special
eligibility requirements.
If the customer tells you that they want to
be co borrowers, they will need to meet our
eligibility requirements for co-borrowers.
If the customer wants a guarantee relationship
or do not meet our eligibility requirements to
be co borrowers, brokers need to refer the
applicant to a different lender.
Lending Guidelines Manual
Discrepancy management
Where Advantedge identifies discrepancies in
the Customer’s name on their ID documents
and other sources of Customer information
(e.g. their application, their contract of sale,
their certificate of title, the Transfer of Land
form and so on), Advantedge will take one or
more of the following actions to be reasonably
satisfied that the Customer is who they say
they are:
• seek additional information or clarification
from the Broker, including requesting
further identification documents
(i.e. a marriage certificate);
• verify the additional information /
clarification received from the Broker/
Customer.
Loan Purposes
Lending must be for personal and personal
investment purposes only. The loan must not
fund business purposes including:
• Loans for business purposes or the
refinancing of business loans (unless the
business has ceased trading).
• Loans for the purchase of a business and/or
goodwill (including investment in a business
owned by a related or associated entity to
the borrower).
• Loans for any type or investment for
property development purposes, that relies
on the completion of the development to
service the facility.
Eligible Applicants –
new lending
Borrower Residency
Borrowers and mortgagors must be one of
the following AND reside in Australia:
1. Australian citizen;
2. Australian Permanent Resident; or
3. NZ Citizen.
Note:
Individuals who hold a Partner / Spousal
Resident Visa (eg: Subclass 309, 820) are
permitted, on the basis that a joint application
is submitted with one of the above defined
eligible borrowers, subject to the lending being
up to a maximum LVR of 70%.
Eligible Applicants –
variations to existing
lending
Borrower Residency
Borrowers, mortgagors, and guarantors
must be one of the following AND reside in
Australia:
1. Australian citizen;
2. Australian Permanent Resident; or
3. NZ Citizen.
Note:
Individuals who hold a Partner / Spousal
Resident Visa (eg: Subclass 309, 820) are
permitted, on the basis that a joint application
is submitted with one of the above defined
eligible borrowers, subject to the lending being
up to a maximum LVR of 70%.
Corporate Entities
1. Registered Australian companies and
subject to company taxation;
2. Trustee companies acting on behalf
of trusts.
For company applicants:
1. All Directors/Trustees/Partners must be
Australian citizens/Permanent Residents/NZ
Citizens AND reside in Australia;
2. Guarantees from company directors are
required; and
3. Companies must not be in the process of
deregistering, winding up or voluntary
administration.
Advantedge will not accept any loan
applications for new lending purposes from
companies, trustee companies and individual
trustees unless it is by way of a variation of
an existing such loan, including construction
on vacant land/renovations to residential
property security.
Co-Borrower Benefit
Purpose
The following policy ensures compliance with
the Banking Code of Practice and is intended
to ensure all co-borrowers on a loan facility
receive a Substantial Benefit from the loan
proceeds and helps to protect vulnerable
members of our society from financial abuse.
Substantial Benefit
An Individual can only be accepted as a
co-borrower where it can be evidenced that
they receive a ‘Substantial Benefit’ from the
loan proceeds, unless they are spouses or de
factos where special eligibility requirements
must be met.
For new home loans and increases involving
joint applicants, brokers must identify whether
each individual co-borrower will receive a
substantial benefit.
This is not required for company borrowers or
individual borrowers, for the purposes of loan
variations, who are:
• acting in their capacity as trustee;
• directors of co-borrower companies;
• partners in a partnership;
• in a joint venture arrangement.
A ‘Substantial Benefit’ includes where each
co-borrower:
• acquires a reasonably proportionate legal or
equitable interest in assets purchased with
the loan funds; or
• utilises a reasonable portion of the
loans funds to repay their debts or other
obligations owed by the co-borrower; or
• will utilise and have access to a reasonable
portion of the loan funds which is not
covered above (for example, a holiday,
medical expenses, household goods, etc)
The minimum percentage required for each
co-borrower to achieve ‘Substantial Benefit’ is
set out below:
NUMBER OF
INDIVIDUAL
CO-BORROWERS
MINIMUM
AMOUNT DEEMED
‘SUBSTANTIAL
BENEFIT’
2 to 4 Minimum 25%
5 or more Equal share
Structuring Options
In cases where a Substantial Benefit cannot be
demonstrated, brokers must discuss with the
proposed co-borrower:
• why they want to be a co-borrower; and
• alternative structuring options with another
mortgage provider such as providing a
security guarantee or, subject to meeting
credit policy requirements, becoming a
servicing guarantor.
The customer needs to understand the risks
associated with entering into the loan and
understand the difference between being a
co-borrower and a guarantor. You must tell
the customer to obtain independent legal and
financial advice before we accept an individual
without Substantial Benefit as a co-borrower.
Customers’ obligations are different between
being a guarantor and being a co-borrower.
Brokers must not suggest a customer who
wants to be a guarantor to be a co-borrower.
You must explain that:
• Advantedge no longer accepts guarantees;
• where there is more than one customer
involved with a loan, Advantedge only
accepts co- borrowers where they have
substantial benefit from the loan unless
they are spouses or de factos;
• for spouses and de factos without
substantial benefit there are special
eligibility requirements.
If the customer tells you that they want to
be co borrowers, they will need to meet our
eligibility requirements for co-borrowers.
If the customer wants a guarantee relationship
or do not meet our eligibility requirements to
be co borrowers, brokers need to refer the
applicant to a different lender.
/ 7Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Co-Borrower Liability
A co-borrower may have to repay the entire amount owing alone. The
bank does not have to ask any other co-borrower to repay before, or at
the same time, it asks any other co-borrower;
This is because each co-borrower is each individually and directly
responsible for the loan repayment obligations. If there’s a problem with
repayment of the loan, the bank may pursue all co- borrowers or any one
of them individually for the amount owing.
Guarantor liability
A Guarantor is someone who promises to repay money that is owed to
us under a loan, if for some reason the borrower doesn’t. If the individual
were a guarantor instead of a borrower, the bank may be required to take
steps against the borrower before it can enforce mortgages given by the
guarantor or judgements against the guarantor.
A guarantor may be able to limit their liability in accordance with the
Banking Code of Practice and legislation. A guarantor may also be able to
ask for contribution from the borrower/s and from other guarantors. The
Banking Code of Practice and the law generally provide other protections
to guarantors that will not apply to a borrower.
Accepting Co-Borrowers without
Substantial Benefit
Where an Individual Co-Borrower does
not receive a ‘Substantial Benefit’ from the
loan requested, and does not wish to be a
Guarantor, you may accept them as a co-
borrower using the exception process provided
the following requirements are met.
The broker:
• has considered and documented the
reasons why that individual wants to be a
Co-Borrower, and the rationale supplied
does not raise concerns;
• is satisfied that the Individual co-borrower
without a Substantial Benefit is not
experiencing financial abuse by completing
the financial abuse question and has not
identified any other signs of financial abuse;
• has recommended the Co-Borrower obtain
independent legal and financial advice in
order to understand the risks associated
with entering into the loan and the
difference between being a Co-Borrower
and a Guarantor; and
• having given the proposed co-borrower
an opportunity to consider their options
and the co-borrower has indicated they
want to proceed as a co-borrower, ensures
the Co-Borrower has completed and
duly executed the Short Form or the
Co-Borrower Acknowledgment – Customer
may receive no Substantial Benefit from the
loan’ form.
• has confirmed that the individual without
a Substantial benefit wants to be a
co borrower.
• must not proceed with the application
without the individual obtaining
independent legal advice, where the broker
is aware that:
– the individual doesn’t understand the
distinction between being a co borrower
and being a guarantor; or,
– the individual is unclear on whether to be
a co borrower or a guarantor.
• must not proceed with the application
if the individual has indicated that they
would prefer to be a guarantor. In these
circumstances, the broker needs to refer the
applicants to a different lender.
IMPORTANT
Where all the above criteria are met:
• For Co-Borrowers who are in a spousal/de-facto relationship, where any Co-Borrower will not receive a Substantial Benefit, approval is not required
to proceed with an application due to Advantedge guarantee appetite and inability to offer a guarantee option which may be more suitable to
these customers.
• For Co-Borrowers who are not in a spousal/de-facto relationship, where any Co-Borrower will not receive a Substantial Benefit:
• New Lending: Unavailable due to Advantedge guarantee appetite and inability to offer a guarantee option which maybe more suitable to
these customers.
• Amendments and variations to existing lending: Minimum DCA Level 3 approval is required.
SCENARIO – “YOU” IN EACH SCENARIO MEANS THE CO-BORROWERS SUBSTANTIAL BENEFIT?
Purchases
You are looking to purchase an owner-occupied property which will be owned by both of you as joint tenants
or tenants in common in equal shares.
Yes
You are borrowing to buy an investment property which will be solely owned by one co-borrower No. Only one co-borrower will receive
a benefit from the loan funds.
Refinances
You are looking to refinance an existing loan with another lender to Advantedge which is in both of
your names.
Yes.
You are looking to refinance an existing loan with another lender to Advantedge which is in the name of one
of you only.
No. If an applicant does not appear
on the title search nor the refinance
statement, they will not be receiving a
benefit to the loan.
You are looking to obtain a new loan to complete construction on land already owned by you jointly. Yes.
You are looking to do a debt consolidation made up of one co-borrower’s credit cards and the other
co-borrower’s personal loans.
Yes, provided that each applicant’s
debt makes up at least 25% of the
loan funds.
New Loans / Limit Increases
You have an existing loan with Advantedge and request a limit increase to renovate an owner-occupied home
owned by both of you as joint tenants or tenants in common in equal shares.
Yes.
Lending Guidelines Manual
Co-Borrower Liability
A co-borrower may have to repay the entire amount owing alone. The
bank does not have to ask any other co-borrower to repay before, or at
the same time, it asks any other co-borrower;
This is because each co-borrower is each individually and directly
responsible for the loan repayment obligations. If there’s a problem with
repayment of the loan, the bank may pursue all co- borrowers or any one
of them individually for the amount owing.
Guarantor liability
A Guarantor is someone who promises to repay money that is owed to
us under a loan, if for some reason the borrower doesn’t. If the individual
were a guarantor instead of a borrower, the bank may be required to take
steps against the borrower before it can enforce mortgages given by the
guarantor or judgements against the guarantor.
A guarantor may be able to limit their liability in accordance with the
Banking Code of Practice and legislation. A guarantor may also be able to
ask for contribution from the borrower/s and from other guarantors. The
Banking Code of Practice and the law generally provide other protections
to guarantors that will not apply to a borrower.
Accepting Co-Borrowers without
Substantial Benefit
Where an Individual Co-Borrower does
not receive a ‘Substantial Benefit’ from the
loan requested, and does not wish to be a
Guarantor, you may accept them as a co-
borrower using the exception process provided
the following requirements are met.
The broker:
• has considered and documented the
reasons why that individual wants to be a
Co-Borrower, and the rationale supplied
does not raise concerns;
• is satisfied that the Individual co-borrower
without a Substantial Benefit is not
experiencing financial abuse by completing
the financial abuse question and has not
identified any other signs of financial abuse;
• has recommended the Co-Borrower obtain
independent legal and financial advice in
order to understand the risks associated
with entering into the loan and the
difference between being a Co-Borrower
and a Guarantor; and
• having given the proposed co-borrower
an opportunity to consider their options
and the co-borrower has indicated they
want to proceed as a co-borrower, ensures
the Co-Borrower has completed and
duly executed the Short Form or the
Co-Borrower Acknowledgment – Customer
may receive no Substantial Benefit from the
loan’ form.
• has confirmed that the individual without
a Substantial benefit wants to be a
co borrower.
• must not proceed with the application
without the individual obtaining
independent legal advice, where the broker
is aware that:
– the individual doesn’t understand the
distinction between being a co borrower
and being a guarantor; or,
– the individual is unclear on whether to be
a co borrower or a guarantor.
• must not proceed with the application
if the individual has indicated that they
would prefer to be a guarantor. In these
circumstances, the broker needs to refer the
applicants to a different lender.
IMPORTANT
Where all the above criteria are met:
• For Co-Borrowers who are in a spousal/de-facto relationship, where any Co-Borrower will not receive a Substantial Benefit, approval is not required
to proceed with an application due to Advantedge guarantee appetite and inability to offer a guarantee option which may be more suitable to
these customers.
• For Co-Borrowers who are not in a spousal/de-facto relationship, where any Co-Borrower will not receive a Substantial Benefit:
• New Lending: Unavailable due to Advantedge guarantee appetite and inability to offer a guarantee option which maybe more suitable to
these customers.
• Amendments and variations to existing lending: Minimum DCA Level 3 approval is required.
SCENARIO – “YOU” IN EACH SCENARIO MEANS THE CO-BORROWERS SUBSTANTIAL BENEFIT?
Purchases
You are looking to purchase an owner-occupied property which will be owned by both of you as joint tenants
or tenants in common in equal shares.
Yes
You are borrowing to buy an investment property which will be solely owned by one co-borrower No. Only one co-borrower will receive
a benefit from the loan funds.
Refinances
You are looking to refinance an existing loan with another lender to Advantedge which is in both of
your names.
Yes.
You are looking to refinance an existing loan with another lender to Advantedge which is in the name of one
of you only.
No. If an applicant does not appear
on the title search nor the refinance
statement, they will not be receiving a
benefit to the loan.
You are looking to obtain a new loan to complete construction on land already owned by you jointly. Yes.
You are looking to do a debt consolidation made up of one co-borrower’s credit cards and the other
co-borrower’s personal loans.
Yes, provided that each applicant’s
debt makes up at least 25% of the
loan funds.
New Loans / Limit Increases
You have an existing loan with Advantedge and request a limit increase to renovate an owner-occupied home
owned by both of you as joint tenants or tenants in common in equal shares.
Yes.
/ 8Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
You have an existing loan with Advantedge and request cash out. There could be multiple reasons for a
cash out:
• Holiday where all co-borrowers are travelling together
• Renovate/ home improvements where the home is owned by all co- borrowers as joint tenants or tenants
in common in equal shares
Yes, as all co-borrowers will benefit
from the loan.
• Cars where all co-borrowers are joint owners of the car (even though the car may only be registered in
one name)
• Parents taking a cash out to gift to their children.
Yes.
You have an existing loan with Advantedge and request cash out. There could be multiple reasons for a
cash out:
• Holiday where only one co-borrower is travelling
• Renovate/ home improvements where the home is owned by only one co-borrower
• Cars where the only one co-borrower owns the car
• Medical
• No. Only one co-borrower will
receive a benefit from the loan
funds.
Guarantees
Advantedge will not accept new loan
applications that require a guarantee of any
type. Furthermore, brokers must not encourage
customers to structure their loan as a
co-borrower where a customer has a
preference for a guarantee structure.
Advantedge will continue to accept home loan
applications with guarantees in the following
circumstances only:
• Variations of existing home loans with
guarantees; including construction on
vacant land/renovations to residential
property security where existing
Advantedge Home Lending has been
financed with guarantee structure already
in place.
• Where there is a variation to existing home
lending with a guarantor who is providing
their principal place of residence, if they are
not in a spousal/ de facto relationship with
the borrower, the guarantors standalone
capacity to service the guarantee obligation
must be assessed and verified.
Full financial information is required from all
guarantors in the same manner as required
from borrowers. Guarantors may be required to
obtain independent legal and financial advice
to ensure they understand the terms of the
Guarantee. In the case of non-English speaking
applicants, the appropriate independent
professional, in the borrower’s native language,
should provide this advice.
A guarantee(s) will be required where an
existing Advantedge loan relies on a guarantee
and:
• The borrower is unable to service the debt
in their own capacity including the use of
Self Employed Income, and is relying on
another separate legal entity to service
• The borrower is a private company other
than a corporate trustee; all directors
must provide personal guarantees. In the
instances where directors act in a nominee
position only (and are unwilling to provide
a guarantee), formal documentation to this
effect must be obtained from the borrower.
• A related company generates income (that
is not considered self-employed) which is
relied upon to service the loan, guarantees
from the directors of the related company
are required.
• The borrower is trustee of a unit trust,
each unit holder will be required to provide
a guarantee.
• A security provider is not a borrower the
security provider must provide a guarantee.
Acceptable Residential
Security Properties
All loans must be secured by a mortgage that
constitutes a first ranking charge over freehold
land or Crown Leasehold land. Where a loan is
to be secured by a mortgage over Crown Lease
in Australia, that Crown Lease must not expire
earlier than 10 years after the maturity date of
the loan.
Acceptable properties are subject to the
criteria as listed below, and any additional
Lenders Mortgage insurance requirements (if
applicable). Advantedge, at its sole discretion,
reserves the right to reject or reduce exposure
to any property or location submitted
for consideration.
Advantedge will consider all security properties
that meet Acceptable Security Property
Requirements. Advantedge will not accept
any loan application that relies on 6 or
more securities.
Properties must be zoned Residential or
equivalent^
, providing it:
• has capacity to be used for residential
purposes;
• can be marketed and sold as residential
property within 12 months; and
• is 50 square metres or greater (including
balconies and car parking). Note: residential
property less than 50 square metres
(including balconies and car parking) or
40 square meters or greater (excluding
balconies and car parking) can be used
as Acceptable Residential Security where
the property is otherwise not expressly
restricted in policy, provided the use as
Acceptable Residential Security has been
approved as a policy exception.
^ Examples of equivalent can include, but not
limited to:
• Mixed Use Zoning
• Residential
• properties where rezoning has not occurred
• Commercial Zoned residences above a
shop where the residence is on a separately
issued title
• Multi-story apartment complexes with
shopping centres below and the residence is
on a separately issued title
Lending Guidelines Manual
You have an existing loan with Advantedge and request cash out. There could be multiple reasons for a
cash out:
• Holiday where all co-borrowers are travelling together
• Renovate/ home improvements where the home is owned by all co- borrowers as joint tenants or tenants
in common in equal shares
Yes, as all co-borrowers will benefit
from the loan.
• Cars where all co-borrowers are joint owners of the car (even though the car may only be registered in
one name)
• Parents taking a cash out to gift to their children.
Yes.
You have an existing loan with Advantedge and request cash out. There could be multiple reasons for a
cash out:
• Holiday where only one co-borrower is travelling
• Renovate/ home improvements where the home is owned by only one co-borrower
• Cars where the only one co-borrower owns the car
• Medical
• No. Only one co-borrower will
receive a benefit from the loan
funds.
Guarantees
Advantedge will not accept new loan
applications that require a guarantee of any
type. Furthermore, brokers must not encourage
customers to structure their loan as a
co-borrower where a customer has a
preference for a guarantee structure.
Advantedge will continue to accept home loan
applications with guarantees in the following
circumstances only:
• Variations of existing home loans with
guarantees; including construction on
vacant land/renovations to residential
property security where existing
Advantedge Home Lending has been
financed with guarantee structure already
in place.
• Where there is a variation to existing home
lending with a guarantor who is providing
their principal place of residence, if they are
not in a spousal/ de facto relationship with
the borrower, the guarantors standalone
capacity to service the guarantee obligation
must be assessed and verified.
Full financial information is required from all
guarantors in the same manner as required
from borrowers. Guarantors may be required to
obtain independent legal and financial advice
to ensure they understand the terms of the
Guarantee. In the case of non-English speaking
applicants, the appropriate independent
professional, in the borrower’s native language,
should provide this advice.
A guarantee(s) will be required where an
existing Advantedge loan relies on a guarantee
and:
• The borrower is unable to service the debt
in their own capacity including the use of
Self Employed Income, and is relying on
another separate legal entity to service
• The borrower is a private company other
than a corporate trustee; all directors
must provide personal guarantees. In the
instances where directors act in a nominee
position only (and are unwilling to provide
a guarantee), formal documentation to this
effect must be obtained from the borrower.
• A related company generates income (that
is not considered self-employed) which is
relied upon to service the loan, guarantees
from the directors of the related company
are required.
• The borrower is trustee of a unit trust,
each unit holder will be required to provide
a guarantee.
• A security provider is not a borrower the
security provider must provide a guarantee.
Acceptable Residential
Security Properties
All loans must be secured by a mortgage that
constitutes a first ranking charge over freehold
land or Crown Leasehold land. Where a loan is
to be secured by a mortgage over Crown Lease
in Australia, that Crown Lease must not expire
earlier than 10 years after the maturity date of
the loan.
Acceptable properties are subject to the
criteria as listed below, and any additional
Lenders Mortgage insurance requirements (if
applicable). Advantedge, at its sole discretion,
reserves the right to reject or reduce exposure
to any property or location submitted
for consideration.
Advantedge will consider all security properties
that meet Acceptable Security Property
Requirements. Advantedge will not accept
any loan application that relies on 6 or
more securities.
Properties must be zoned Residential or
equivalent^
, providing it:
• has capacity to be used for residential
purposes;
• can be marketed and sold as residential
property within 12 months; and
• is 50 square metres or greater (including
balconies and car parking). Note: residential
property less than 50 square metres
(including balconies and car parking) or
40 square meters or greater (excluding
balconies and car parking) can be used
as Acceptable Residential Security where
the property is otherwise not expressly
restricted in policy, provided the use as
Acceptable Residential Security has been
approved as a policy exception.
^ Examples of equivalent can include, but not
limited to:
• Mixed Use Zoning
• Residential
• properties where rezoning has not occurred
• Commercial Zoned residences above a
shop where the residence is on a separately
issued title
• Multi-story apartment complexes with
shopping centres below and the residence is
on a separately issued title
/ 9Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Rural residential
(or similar zoned)
properties
Rural Property can be treated as Acceptable Residential Security if it can be completed on a residential valuation
and passes all of the following Marketability Test:
• The property is (or can be) legally used for residential/rural residential purposes without specific permit requirements.
• The property has the capacity to be used for residential purposes.
• The property is not a main source of income for the customer and/or does not generate (or intend to generate) net trading
income (net profit, before tax and addbacks) of more than $50,000 per year. Where the rural property is leased to a third
party, enquiries must be made to determine whether the third party generates (or intends to generate) net trading income
(net profit, before tax and addbacks) of more than $50,000 per year from the property.
• Power is connected to the property.
• Water applicable to the area is connected to the property (ie tank, bore or town water).
• The property is not a Rural Crown Leasehold.
• The property is the lower of:
• Less than 10 hectares (25 acres) in size; or
• Less than 2.2 hectares (5 acres or 22,000 m 2
) if there is no residence or dwelling on the property.
• The property is located:
• Within 50 kms of a provincial city with a population greater than 20,000; or
• Within 20 kms of a primary regional town with a population greater than 10,000; or
• Within 10 kms of NAB Store/Branch location based in NSW or VIC states only. (Note: Does not include
NAB Agency/Outlet).
Where there is any doubt about the zoning, a copy of the planning certificate for the property being offered as security must be
obtained; or the matter must be confirmed by minimum DCA level 3.
Where the Rural Property does not pass the Marketability Test and a residential valuation has been completed, a request
to minimum DCA Level 3 to have a property considered as acceptable residential security can be requested and must be
accompanied with evidence that the property:
• Is being used wholly or predominantly for residential purposes;
• Is less than 100 hectares (240 acres) in size. For LMI applications, land size must not exceed 50 hectares (120 acres);
• Does not generate (or intend to generate) net trading income (net profit, before tax and addbacks) of more than $50,000
per year. Where the rural property is leased to a third party, enquiries must be made to determine whether the third party
generates (or intends to generate) net trading income (net profit, before tax and addbacks) of more than $50,000 per year
from the property;
• Does not generate income that the customer/guarantor is reliant on to demonstrate debt servicing; and
• Would have similar marketability to a property zoned residential.
When minimum DCA Level 3 assesses a request to consider a rural property as acceptable residential security, the decision must
be based on the marketability of the property (in conjunction with the evidence provided (as detailed above)
If the Rural Property does not pass the Marketability Test, and minimum DCA Level 3:
• Approves the property as acceptable residential security – a Home Loan Product can be offered up to:
– A maximum LVR of 80% on a maximum land size of 100 hectares; or
– If LMI applies, a maximum LVR of 90% on a maximum land size of 50 hectares.
• Does not approve the property as acceptable residential security – the Rural Property cannot be accepted as
security for any home lending purposes.
Units/ flats/
apartments
• Each must comprise an area of at least 50 square metres (includes balconies and car parking) or 40 square meters or greater
(excluding balconies and car parking).
Lending Guidelines Manual
Rural residential
(or similar zoned)
properties
Rural Property can be treated as Acceptable Residential Security if it can be completed on a residential valuation
and passes all of the following Marketability Test:
• The property is (or can be) legally used for residential/rural residential purposes without specific permit requirements.
• The property has the capacity to be used for residential purposes.
• The property is not a main source of income for the customer and/or does not generate (or intend to generate) net trading
income (net profit, before tax and addbacks) of more than $50,000 per year. Where the rural property is leased to a third
party, enquiries must be made to determine whether the third party generates (or intends to generate) net trading income
(net profit, before tax and addbacks) of more than $50,000 per year from the property.
• Power is connected to the property.
• Water applicable to the area is connected to the property (ie tank, bore or town water).
• The property is not a Rural Crown Leasehold.
• The property is the lower of:
• Less than 10 hectares (25 acres) in size; or
• Less than 2.2 hectares (5 acres or 22,000 m 2
) if there is no residence or dwelling on the property.
• The property is located:
• Within 50 kms of a provincial city with a population greater than 20,000; or
• Within 20 kms of a primary regional town with a population greater than 10,000; or
• Within 10 kms of NAB Store/Branch location based in NSW or VIC states only. (Note: Does not include
NAB Agency/Outlet).
Where there is any doubt about the zoning, a copy of the planning certificate for the property being offered as security must be
obtained; or the matter must be confirmed by minimum DCA level 3.
Where the Rural Property does not pass the Marketability Test and a residential valuation has been completed, a request
to minimum DCA Level 3 to have a property considered as acceptable residential security can be requested and must be
accompanied with evidence that the property:
• Is being used wholly or predominantly for residential purposes;
• Is less than 100 hectares (240 acres) in size. For LMI applications, land size must not exceed 50 hectares (120 acres);
• Does not generate (or intend to generate) net trading income (net profit, before tax and addbacks) of more than $50,000
per year. Where the rural property is leased to a third party, enquiries must be made to determine whether the third party
generates (or intends to generate) net trading income (net profit, before tax and addbacks) of more than $50,000 per year
from the property;
• Does not generate income that the customer/guarantor is reliant on to demonstrate debt servicing; and
• Would have similar marketability to a property zoned residential.
When minimum DCA Level 3 assesses a request to consider a rural property as acceptable residential security, the decision must
be based on the marketability of the property (in conjunction with the evidence provided (as detailed above)
If the Rural Property does not pass the Marketability Test, and minimum DCA Level 3:
• Approves the property as acceptable residential security – a Home Loan Product can be offered up to:
– A maximum LVR of 80% on a maximum land size of 100 hectares; or
– If LMI applies, a maximum LVR of 90% on a maximum land size of 50 hectares.
• Does not approve the property as acceptable residential security – the Rural Property cannot be accepted as
security for any home lending purposes.
Units/ flats/
apartments
• Each must comprise an area of at least 50 square metres (includes balconies and car parking) or 40 square meters or greater
(excluding balconies and car parking).
/ 10Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Speculative
Residential
Security
Residential properties are considered speculative when they involve the following property types:
• existing or not yet developed residential property where four residences or more are held as part of a single development;
and/or
• land held for future residential development or sub-division into four lots or more.
Additional risks exist when security comprises multiple residences or lots in the same development and it may not be possible to
sell all of them quickly and without a price discount.
Speculative residential property is not considered as Acceptable Residential Security
Note: In exceptional circumstances a minimum DCA Level 3 may determine whether the properties can be classified as
acceptable residential security. In determining the suitability of a property as acceptable residential security, minimum DCA Level
3 must consider all of the following issues and if approved, record as a policy exception:
• The proportion of residences/lots held in the development. If the residences/lots form a high proportion of the total
development, will this adversely affect the Bank’s ability to market and dispose of the properties quickly and without
discount in the event that security must be realised? This risk increases with the size of the development.
• The nature and features of the development. Are there any specific or unique features that would limit the Bank’s ability to
sell the residences/lots individually or that would require a discount or extended sales period (for example, common or shared
areas within the development, or remote location of the development)?
• Marketability of the residences/lots in the development. How strong is the demand for these residences/lots? Could the
residences/lots be sold quickly at the same time, on an individual basis and without discount, or is the market such that a
discount may be needed to sell the residences/lots together?
• The capacity of the customer to service or repay the debt other than from the short-term sale of the properties Is a major
part of the customer’s repayment strategy the short-term sale of some or all of the properties? Can the customer service or
repay the debt from other income sources?
Restricted and
inner- city
postcodes
• Properties located within Restricted Postcodes will be bound by LVR limits, which are set based on the location, and risk of
the security type. Refer to the Post code tool for detailed restrictions. Note: DCA Holder approval required to consider
outside these requirements.
Serviced
Apartments
A serviced apartment is an apartment that is approved and used for holiday and short term (generally less than three months)
accommodation. Typically, serviced apartments are centrally managed and serviced and subject to a management agreement.
In certain circumstances, serviced apartments can be considered normal ‘residential apartments’ with a copy of the management
agreement required to be provided to consider the serviced apartment as Acceptable Residential Security.
For Serviced Apartments to be treated as Acceptable Residential Security all of the following criteria are to be met:
• They are legally permitted for permanent residential use based on the zoning and planning regulations of the property.
• Minimum DCA Level 3 confirms they can be removed from the management agreement at any time and within a maximum
of four months.
• Any applicant is not the principal, a director, or a shareholder of the company operating the management agreement.
• Advantedge (including valuers) can deal with the property in the normal residential property market, separate from the
operation of the overall development in which the property is located.
If the above criteria are not met the Serviced Apartment cannot be treated as Acceptable Residential Security.
Properties
impacted
by Potential
Flammable
Cladding
Properties which are impacted by potential flammable cladding will be assigned a Risk Alert of 5. These properties must be
restricted to a maximum LVR of 70%.
Additional requirements must be confirmed by the customer – refer to guidance from Valuation Services Any exceptions
must be:
• Approved by minimum DCA Level 2
• Approved on a P&I basis only
Lending Guidelines Manual
Speculative
Residential
Security
Residential properties are considered speculative when they involve the following property types:
• existing or not yet developed residential property where four residences or more are held as part of a single development;
and/or
• land held for future residential development or sub-division into four lots or more.
Additional risks exist when security comprises multiple residences or lots in the same development and it may not be possible to
sell all of them quickly and without a price discount.
Speculative residential property is not considered as Acceptable Residential Security
Note: In exceptional circumstances a minimum DCA Level 3 may determine whether the properties can be classified as
acceptable residential security. In determining the suitability of a property as acceptable residential security, minimum DCA Level
3 must consider all of the following issues and if approved, record as a policy exception:
• The proportion of residences/lots held in the development. If the residences/lots form a high proportion of the total
development, will this adversely affect the Bank’s ability to market and dispose of the properties quickly and without
discount in the event that security must be realised? This risk increases with the size of the development.
• The nature and features of the development. Are there any specific or unique features that would limit the Bank’s ability to
sell the residences/lots individually or that would require a discount or extended sales period (for example, common or shared
areas within the development, or remote location of the development)?
• Marketability of the residences/lots in the development. How strong is the demand for these residences/lots? Could the
residences/lots be sold quickly at the same time, on an individual basis and without discount, or is the market such that a
discount may be needed to sell the residences/lots together?
• The capacity of the customer to service or repay the debt other than from the short-term sale of the properties Is a major
part of the customer’s repayment strategy the short-term sale of some or all of the properties? Can the customer service or
repay the debt from other income sources?
Restricted and
inner- city
postcodes
• Properties located within Restricted Postcodes will be bound by LVR limits, which are set based on the location, and risk of
the security type. Refer to the Post code tool for detailed restrictions. Note: DCA Holder approval required to consider
outside these requirements.
Serviced
Apartments
A serviced apartment is an apartment that is approved and used for holiday and short term (generally less than three months)
accommodation. Typically, serviced apartments are centrally managed and serviced and subject to a management agreement.
In certain circumstances, serviced apartments can be considered normal ‘residential apartments’ with a copy of the management
agreement required to be provided to consider the serviced apartment as Acceptable Residential Security.
For Serviced Apartments to be treated as Acceptable Residential Security all of the following criteria are to be met:
• They are legally permitted for permanent residential use based on the zoning and planning regulations of the property.
• Minimum DCA Level 3 confirms they can be removed from the management agreement at any time and within a maximum
of four months.
• Any applicant is not the principal, a director, or a shareholder of the company operating the management agreement.
• Advantedge (including valuers) can deal with the property in the normal residential property market, separate from the
operation of the overall development in which the property is located.
If the above criteria are not met the Serviced Apartment cannot be treated as Acceptable Residential Security.
Properties
impacted
by Potential
Flammable
Cladding
Properties which are impacted by potential flammable cladding will be assigned a Risk Alert of 5. These properties must be
restricted to a maximum LVR of 70%.
Additional requirements must be confirmed by the customer – refer to guidance from Valuation Services Any exceptions
must be:
• Approved by minimum DCA Level 2
• Approved on a P&I basis only
/ 11Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Unacceptable
Residential Security
Properties
The following are considered unacceptable
residential security, with the exception where
prescribed property/security criteria are met, as
per Acceptable Residential Security Properties.
• Student Accommodation.
• Company Share Titles and Stratum Titles.
• Owner-builder construction projects.
• Mobile and kit homes (i.e. transportable
properties).
• Community titles that are situated within
Community Title Scheme (development)
where lending requested is to purchase
vacant land and/or for construction
purposes.
• Rural Property
• Speculative Residential Security
• Serviced Apartments
• Multiple construction on one title
Valuations
Approved Valuers
A valuation report, prepared by an Advantedge
approved panel valuer, must accompany each
application. Valuations must be ordered via
CoreLogic’s PropertyHub. No exceptions to
this will be accepted. Only accredited staff
can utilise the CoreLogic’s PropertyHub.
CoreLogic’s PropertyHub will process the
request for a valuation report according to
Advantedge instructions.
Disclosure
The valuation must not be communicated to
customers, property owners, or any other
person with the following exceptions:
• The customers broker
• Where customer requests in writing
to receive a copy of a valuation report
completed by an external panel valuer and
signs a copy of the ‘Valuation Release Form’
(refer Customer Release Authority)
(Note: Valuation reports completed by NAB’s
internal valuation firm (NAB Valuations), are
not to be released to the customer at any time)
Valuation Types
The following types of valuations are
acceptable (subject to LMI Provider Valuation
Requirements):
1. AVM (Automated Valuation Model)
2. Desktops
3. Kerbsides/Restricted Assessment
4. Short Form
5. Long Form
The type of valuation ordered will be
determined by the Business Rules Engine.
External Panel Reports must have the following
included as interested parties:
1. National Australia Bank and its related
bodies corporate,
2. QBE Lenders Mortgage Insurance Limited
(Short Form and Long Form only)
3. Perpetual Trustees Victoria Limited
4. The Mortgage Manager (optional)
Note: Reports completed by NAB Valuations
(NAB’s internal valuations team) will not include
all the above parties but are acceptable for use
by Advantedge.
Valuation Requirements
1. The valuation report must confirm that
the property is readily saleable with no
adverse features.
2. Any sales evidence must not be within the
same complex.
3. Vacant land must be valued on an ‘as is’
basis.
4. Construction valuations must be made on a
to-be-erected (TBE) basis and the Valuation
must confirm:
• the Fixed Price Building Contact is an
acceptable Industry Standard; AND
• proposed Construction Stage Costings are
reasonable and meet below requirements.
Recording a valuation outcome - contract
of sale
When a customer is purchasing, or has
purchased a property, that has not yet settled,
the market value (M/V) must be recorded as
the lesser value of the contract of sale purchase
price (must be executed less than 12 months
from valuation date); or valuation.
If the contract of sale purchase price and
valuation are within $1,000 of each other, then
the higher value may be recorded.
Exceptions:
Valuations must be used as the market value
(MV) where:
• The COS was executed (in accordance
with state or territory law) and dated more
than 12 months prior to the valuation
completion date.
• The COS is non-arm’s length or negotiated
without the involvement of an agent;
Note: Customers must contribute minimum
equity (i.e. cash or supporting security) of 5%
of the contract of sale purchase price plus costs
(i.e. land transfer stamp duty, lenders mortgage
insurance (if applicable), and government fees
and charges).
Construction valuations:
The market value (M/V) must be recorded as
the lower of:
• Overall land value plus the cost of
construction/development; or
• Market Value returned on the Valuation
report.
Note: If the two values are within $1,000 of
each other, then the higher value may
be recorded.
Exceptions:
• For renovations or extension of an existing
house, M/V on valuation report can be
relied upon.
• For land properties that have already settled
the land M/V on the valuation report must
be relied upon
• Where the COS is dated more than 12
months, the land M/V on the valuation
must be relied upon
Off-the-plan Purchases
For off the plan purchases of a medium or
high-density apartment, only submit the
application to Advantedge when the property
is nearing completion, or for an AIP. For formal
approval, the property must be practically
completed, and you must ensure the physical
valuation* is completed and it is:
• Dated within 90 days at the time of
unconditional approval; and
• When completed as a short form or higher,
the valuation report must contain no
indication that the property is incomplete or
partially complete; or
• When completed as a kerbside or when the
short form (or higher) indicates property is
incomplete or partially complete, supported
by an occupancy certificate.
Notes:
• An apartment is considered a medium
density apartment when the total number
of apartments in the complex is greater
than or equal to 20 apartments, and less
than 50 apartments.
• An apartment is considered a high-density
apartment when the total number of
apartments in the complex is equal to or
greater than 50 apartments.
*A physical valuation refers to valuation types
where the property is inspected by a valuer.
Lending Guidelines Manual
Unacceptable
Residential Security
Properties
The following are considered unacceptable
residential security, with the exception where
prescribed property/security criteria are met, as
per Acceptable Residential Security Properties.
• Student Accommodation.
• Company Share Titles and Stratum Titles.
• Owner-builder construction projects.
• Mobile and kit homes (i.e. transportable
properties).
• Community titles that are situated within
Community Title Scheme (development)
where lending requested is to purchase
vacant land and/or for construction
purposes.
• Rural Property
• Speculative Residential Security
• Serviced Apartments
• Multiple construction on one title
Valuations
Approved Valuers
A valuation report, prepared by an Advantedge
approved panel valuer, must accompany each
application. Valuations must be ordered via
CoreLogic’s PropertyHub. No exceptions to
this will be accepted. Only accredited staff
can utilise the CoreLogic’s PropertyHub.
CoreLogic’s PropertyHub will process the
request for a valuation report according to
Advantedge instructions.
Disclosure
The valuation must not be communicated to
customers, property owners, or any other
person with the following exceptions:
• The customers broker
• Where customer requests in writing
to receive a copy of a valuation report
completed by an external panel valuer and
signs a copy of the ‘Valuation Release Form’
(refer Customer Release Authority)
(Note: Valuation reports completed by NAB’s
internal valuation firm (NAB Valuations), are
not to be released to the customer at any time)
Valuation Types
The following types of valuations are
acceptable (subject to LMI Provider Valuation
Requirements):
1. AVM (Automated Valuation Model)
2. Desktops
3. Kerbsides/Restricted Assessment
4. Short Form
5. Long Form
The type of valuation ordered will be
determined by the Business Rules Engine.
External Panel Reports must have the following
included as interested parties:
1. National Australia Bank and its related
bodies corporate,
2. QBE Lenders Mortgage Insurance Limited
(Short Form and Long Form only)
3. Perpetual Trustees Victoria Limited
4. The Mortgage Manager (optional)
Note: Reports completed by NAB Valuations
(NAB’s internal valuations team) will not include
all the above parties but are acceptable for use
by Advantedge.
Valuation Requirements
1. The valuation report must confirm that
the property is readily saleable with no
adverse features.
2. Any sales evidence must not be within the
same complex.
3. Vacant land must be valued on an ‘as is’
basis.
4. Construction valuations must be made on a
to-be-erected (TBE) basis and the Valuation
must confirm:
• the Fixed Price Building Contact is an
acceptable Industry Standard; AND
• proposed Construction Stage Costings are
reasonable and meet below requirements.
Recording a valuation outcome - contract
of sale
When a customer is purchasing, or has
purchased a property, that has not yet settled,
the market value (M/V) must be recorded as
the lesser value of the contract of sale purchase
price (must be executed less than 12 months
from valuation date); or valuation.
If the contract of sale purchase price and
valuation are within $1,000 of each other, then
the higher value may be recorded.
Exceptions:
Valuations must be used as the market value
(MV) where:
• The COS was executed (in accordance
with state or territory law) and dated more
than 12 months prior to the valuation
completion date.
• The COS is non-arm’s length or negotiated
without the involvement of an agent;
Note: Customers must contribute minimum
equity (i.e. cash or supporting security) of 5%
of the contract of sale purchase price plus costs
(i.e. land transfer stamp duty, lenders mortgage
insurance (if applicable), and government fees
and charges).
Construction valuations:
The market value (M/V) must be recorded as
the lower of:
• Overall land value plus the cost of
construction/development; or
• Market Value returned on the Valuation
report.
Note: If the two values are within $1,000 of
each other, then the higher value may
be recorded.
Exceptions:
• For renovations or extension of an existing
house, M/V on valuation report can be
relied upon.
• For land properties that have already settled
the land M/V on the valuation report must
be relied upon
• Where the COS is dated more than 12
months, the land M/V on the valuation
must be relied upon
Off-the-plan Purchases
For off the plan purchases of a medium or
high-density apartment, only submit the
application to Advantedge when the property
is nearing completion, or for an AIP. For formal
approval, the property must be practically
completed, and you must ensure the physical
valuation* is completed and it is:
• Dated within 90 days at the time of
unconditional approval; and
• When completed as a short form or higher,
the valuation report must contain no
indication that the property is incomplete or
partially complete; or
• When completed as a kerbside or when the
short form (or higher) indicates property is
incomplete or partially complete, supported
by an occupancy certificate.
Notes:
• An apartment is considered a medium
density apartment when the total number
of apartments in the complex is greater
than or equal to 20 apartments, and less
than 50 apartments.
• An apartment is considered a high-density
apartment when the total number of
apartments in the complex is equal to or
greater than 50 apartments.
*A physical valuation refers to valuation types
where the property is inspected by a valuer.
/ 12Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Valuation Age
Valuations must be no older than outlined below.
SECURITY TYPE / LMI / VALUATION TYPE AGE AT UNCONDITIONAL APPROVAL
Short Form / AVM/ Desktop/ Kerbside 36 Months
Inner City Apartments and off-the-plan Purchases (Low Density apartments) 36 Months
Off-the-plan Purchases (Medium and High-Density apartments) 90 days
Where LMI is applicable (separate to the above) 12 months
Note: Continued reliance on an existing
valuation can be continued to be relied upon
for up to 36 months as at the submission
date for:
• Non-LMI applications
• the property being sold (COS held)
• the property being outwardly refinanced
(discharge received)
NB: An existing valuation can only be relied
on where it complies with current policy
requirements for the application, including
valuation type determined by the Valuation
Business Rules Engine.
The Business Rules Engine (BRE) will correctly
determine an LMI acceptable valuation type
where a Banker/Broker has entered/ selected
information into the applicable fields. All
valuation requirements must be verified and
satisfied prior to processing approvals.
LMI Provider Acceptable and
Unacceptable Valuations
The following cannot be waived at any
Delegated Commitment Authority level as it will
void any Lenders Mortgage Insurance policies:
• Panel firm’ valuations (excluding desktop
assessment) must be addressed to the Bank
and state they can be relied on by the LMI
provider.
• Downgrade Valuation Types determined by
Business Rules Engine (BRE).
QBE – Acceptable Valuation Types
The following valuation types are acceptable to
QBE and can be relied upon for LMI purposes:
1. Desktop Assessment conducted by NAB
Valuations and Panel Firms – Including
Desktop +
2. Automated Valuation Model (AVM) report
3. NAB Kerbside Valuation report (completed
by NAB Valuations)
4. NAB Full Inspection Report (completed by
NAB Valuations)
5. Residential/Construction Long Form
Valuation
6. Residential/Construction Short Form
Valuation (including SMARTval)
Note: The valuation must not be older than
12 months as at the credit decision date.
QBE – Unacceptable Valuation Types
The following valuation types are not
acceptable to QBE for LMI purposes:
1. Restricted Valuations (kerbside conducted
by Panel Firms)
2. NAB Platinum Report (completed by NAB
Valuations)
Note: For Construction loans a progress
payment report does not constitute a valuation
*Refer to table below for AVM and Desktop (Panel Firms and
NAB Valuations) requirements.
LOAN
PURPOSE
ACCEPTABLE
VALUATION TYPE
PROPERTY TYPE CRITERIA MAX LVR ACCEPTED PROPERTY VALUE
Purchase or
Refinance
Automated
Valuation Model
(AVM)
All property types excluding:
• Properties with settlement greater than
90 days from the contract of sale date/sales
advice date; or
• Vacant land; or
• Off the plan; or
• New dwellings (not previously occupied); or
• Properties with authenticity doubts^
Up to and including
90% **
Minimum property
value $250,000
Up to a maximum
value of $2,000,000
Purchase or
Refinance
Desktop (Panel
Firms and NAB
Valuations)
All property types excluding:
• Properties with authenticity doubts^
Up to and including
90% **
Up to a maximum
value of $2,000,000
Purchase or
Refinance
Desktop + (NAB
Valuations)
All property types excluding:
• Properties with authenticity doubts ^
Up to and including
90% **
Up to a maximum
value of $4,000,000
** Capitalised LMI premium can be included beyond this level
Lending Guidelines Manual
Valuation Age
Valuations must be no older than outlined below.
SECURITY TYPE / LMI / VALUATION TYPE AGE AT UNCONDITIONAL APPROVAL
Short Form / AVM/ Desktop/ Kerbside 36 Months
Inner City Apartments and off-the-plan Purchases (Low Density apartments) 36 Months
Off-the-plan Purchases (Medium and High-Density apartments) 90 days
Where LMI is applicable (separate to the above) 12 months
Note: Continued reliance on an existing
valuation can be continued to be relied upon
for up to 36 months as at the submission
date for:
• Non-LMI applications
• the property being sold (COS held)
• the property being outwardly refinanced
(discharge received)
NB: An existing valuation can only be relied
on where it complies with current policy
requirements for the application, including
valuation type determined by the Valuation
Business Rules Engine.
The Business Rules Engine (BRE) will correctly
determine an LMI acceptable valuation type
where a Banker/Broker has entered/ selected
information into the applicable fields. All
valuation requirements must be verified and
satisfied prior to processing approvals.
LMI Provider Acceptable and
Unacceptable Valuations
The following cannot be waived at any
Delegated Commitment Authority level as it will
void any Lenders Mortgage Insurance policies:
• Panel firm’ valuations (excluding desktop
assessment) must be addressed to the Bank
and state they can be relied on by the LMI
provider.
• Downgrade Valuation Types determined by
Business Rules Engine (BRE).
QBE – Acceptable Valuation Types
The following valuation types are acceptable to
QBE and can be relied upon for LMI purposes:
1. Desktop Assessment conducted by NAB
Valuations and Panel Firms – Including
Desktop +
2. Automated Valuation Model (AVM) report
3. NAB Kerbside Valuation report (completed
by NAB Valuations)
4. NAB Full Inspection Report (completed by
NAB Valuations)
5. Residential/Construction Long Form
Valuation
6. Residential/Construction Short Form
Valuation (including SMARTval)
Note: The valuation must not be older than
12 months as at the credit decision date.
QBE – Unacceptable Valuation Types
The following valuation types are not
acceptable to QBE for LMI purposes:
1. Restricted Valuations (kerbside conducted
by Panel Firms)
2. NAB Platinum Report (completed by NAB
Valuations)
Note: For Construction loans a progress
payment report does not constitute a valuation
*Refer to table below for AVM and Desktop (Panel Firms and
NAB Valuations) requirements.
LOAN
PURPOSE
ACCEPTABLE
VALUATION TYPE
PROPERTY TYPE CRITERIA MAX LVR ACCEPTED PROPERTY VALUE
Purchase or
Refinance
Automated
Valuation Model
(AVM)
All property types excluding:
• Properties with settlement greater than
90 days from the contract of sale date/sales
advice date; or
• Vacant land; or
• Off the plan; or
• New dwellings (not previously occupied); or
• Properties with authenticity doubts^
Up to and including
90% **
Minimum property
value $250,000
Up to a maximum
value of $2,000,000
Purchase or
Refinance
Desktop (Panel
Firms and NAB
Valuations)
All property types excluding:
• Properties with authenticity doubts^
Up to and including
90% **
Up to a maximum
value of $2,000,000
Purchase or
Refinance
Desktop + (NAB
Valuations)
All property types excluding:
• Properties with authenticity doubts ^
Up to and including
90% **
Up to a maximum
value of $4,000,000
** Capitalised LMI premium can be included beyond this level
/ 13Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Replacement or Updated Valuation
Reports
If any of the following change you can use the
portal to see if the valuation you have is still
valid.
• LVR
• Postcode
• Loan Amount
The portal will check the business rules engine
and indicate the TYPE of valuation that is valid
for the new amount prior to ordering.
A new or updated valuation report is
required when:
1. There is a new security;
2. The property is an off the plan purchase of
a medium or high-density apartment and
the valuation is greater than 90 days old as
at date of unconditional approval.
3. For non-residential properties:
• There is reason to believe the property
value has declined, OR
• The existing property security is a
specialised property and the existing
valuation is greater than 36 months old.
4. There is new or increased lending against
existing property security and either:
• the existing valuation is older than
12 months for Lender’s Mortgage
Insurance (LMI) application; or
• the existing valuation does not comply
with Lenders Mortgage Insurance policy
requirements.
5. The existing valuation completed date is
greater than 36 months old for all other
applications.
6. The date of the valuation reports falls
outside the parameters outlined in the
valuation table.
7. The duration for reliance, stated by the
valuer in the report, expires.
8. There are authenticity doubts.
9. The property has been impacted by a
natural disaster.
Security Risk Ratings and
Valuation
Risk Alerts
Residential property valuation reports contain
Security Risk Ratings and Valuation Risk Alerts
(if applicable), with requirement for review,
comment, and acceptance by respective DCA
holder necessary when any of the following is
evident for both LMI and non-LMI applications:
Security Risk Ratings
• 2 or more Risk Ratings of 4
• 1 or more Risk ratings of 5; OR
• Any Valuation Risk Alert (VRA) and VRA
commentary.
Valuation Risk Alerts
• Any Valuation Risk Alert (VRA) and VRA
commentary.
Inconsistencies or potential risks identified in
photos supplied within the valuation that are
not identified in the valuation report must be
disputed with the valuer.
DCA holders are not required to comment on
VRA alerts relating to:
1. Flooding, Bushfire and Cyclones.
2. Location issues including but not limited to
busy roads, transmission lines.
Authenticity Doubts
A Physical property inspection and valuation is
required when there are authenticity doubts.
To assess authenticity, the following examples
should be considered:
• Rental guarantee is included in the contract.
• Private sale that have not been advertised
and transaction completed without a real
estate agent.
• The Contract of Sale price has been altered
after the valuation by up to +/- 10%*.
• The property is being purchased by an
interstate buyer
• Where the contract includes a side
agreement – i.e. discount to the purchase
price where certain conditions are met.
• Where the contract is not expressed in
Australian dollars.
• Where the purchase contract indicates a
leaseback arrangement.
• Security affected by natural disaster.
• Off the plan purchases of medium and
high-density apartments.
* Where a contract of sale has been altered (for monetary
reasons) and not considered within the valuation report,
bankers must dispute the last valuation and upload the
amended full COS for Valuer to review (excluding when an
AVM has been completed). Refer to Disputing a Valuation.
Note: Above requirements for a physical
inspection/valuation do not apply where the
transaction is a consequence of a marital
separation or deceased estate which involves
a property transfer between the existing
mortgagors. No policy exception is required to
be recorded for this circumstance.
When a sworn valuation is obtained for a loan
with Lender’s Mortgage Insurance (LMI), the
valuation must state that the LMI provider can
rely on it. This requirement cannot be waived
at any DCA level due to the Bank’s contractual
obligations with its LMI providers.
General Insurance
Advantedge requires general insurance to
be in place on the secured property prior to
settlement, and to be maintained at all times.
Upon signing a contract of same, the
purchaser assumes the risk of any damage to
the property. The purchaser may be required
to proceed with the transaction and pay the
vendor despite damage or destruction of the
property. The purchaser should therefore insure
the property upon singing the contact of sale.
Brokers must:
• Ensure insurance cover held over assets
being provided as security and with an
insurer approved by the Advantedge prior
to drawdown.
• Collect evidence of insurance for new
property (i.e. new mortgage being taken)
- excluding vacant land and strata title
property* security.
• Refer to the Construction Loans section
for insurance requirements for properties
under construction.
Note:
• *Strata Corporations/Body Corporations
are required to hold buildings insurance
as part of each state/territory legislative
requirements - a copy of the master
insurance policy covering the strata
property is not required to be held
by Advantedge
• For land only properties, no evidence of
insurance is required.
Brokers must obtain one of the following
acceptable verification documents to evidence
insurance cover is held:
• Building insurance policy;
• Certificate of Currency; or
• Invoice from the insurer accompanied by
verification of invoice payment (where
the invoice contains the full details of the
insurance cover to enable each of the
verification steps below to be completed).
Advantedge will verify the following once
acceptable evidence of insurance has been
obtained:
• The insurer is acceptable, i.e. contained
on APRA’s list of Insurers Authorised
to Conduct New or Renewal Insurance
Business in Australia;
• The settlement date precedes the insurance
expiry date;
• At least one mortgagor is recorded as an
insured party; and
• The property is identified and the location
matches records held (exception: for
construction loans, blanket insurance
policies are acceptable if all conditions
are met)
• AFSH Nominees Pty Ltd must be noted as
having an interest as mortgagee and noted
on the policy for properties with a market
value over $2 million.
For information related to co-insurance (where
two or more insurance policies covering the
same security, or the requirements for home
insurance claims to rebuilt – contact your BDM
for guidance.
Lending Guidelines Manual
Replacement or Updated Valuation
Reports
If any of the following change you can use the
portal to see if the valuation you have is still
valid.
• LVR
• Postcode
• Loan Amount
The portal will check the business rules engine
and indicate the TYPE of valuation that is valid
for the new amount prior to ordering.
A new or updated valuation report is
required when:
1. There is a new security;
2. The property is an off the plan purchase of
a medium or high-density apartment and
the valuation is greater than 90 days old as
at date of unconditional approval.
3. For non-residential properties:
• There is reason to believe the property
value has declined, OR
• The existing property security is a
specialised property and the existing
valuation is greater than 36 months old.
4. There is new or increased lending against
existing property security and either:
• the existing valuation is older than
12 months for Lender’s Mortgage
Insurance (LMI) application; or
• the existing valuation does not comply
with Lenders Mortgage Insurance policy
requirements.
5. The existing valuation completed date is
greater than 36 months old for all other
applications.
6. The date of the valuation reports falls
outside the parameters outlined in the
valuation table.
7. The duration for reliance, stated by the
valuer in the report, expires.
8. There are authenticity doubts.
9. The property has been impacted by a
natural disaster.
Security Risk Ratings and
Valuation
Risk Alerts
Residential property valuation reports contain
Security Risk Ratings and Valuation Risk Alerts
(if applicable), with requirement for review,
comment, and acceptance by respective DCA
holder necessary when any of the following is
evident for both LMI and non-LMI applications:
Security Risk Ratings
• 2 or more Risk Ratings of 4
• 1 or more Risk ratings of 5; OR
• Any Valuation Risk Alert (VRA) and VRA
commentary.
Valuation Risk Alerts
• Any Valuation Risk Alert (VRA) and VRA
commentary.
Inconsistencies or potential risks identified in
photos supplied within the valuation that are
not identified in the valuation report must be
disputed with the valuer.
DCA holders are not required to comment on
VRA alerts relating to:
1. Flooding, Bushfire and Cyclones.
2. Location issues including but not limited to
busy roads, transmission lines.
Authenticity Doubts
A Physical property inspection and valuation is
required when there are authenticity doubts.
To assess authenticity, the following examples
should be considered:
• Rental guarantee is included in the contract.
• Private sale that have not been advertised
and transaction completed without a real
estate agent.
• The Contract of Sale price has been altered
after the valuation by up to +/- 10%*.
• The property is being purchased by an
interstate buyer
• Where the contract includes a side
agreement – i.e. discount to the purchase
price where certain conditions are met.
• Where the contract is not expressed in
Australian dollars.
• Where the purchase contract indicates a
leaseback arrangement.
• Security affected by natural disaster.
• Off the plan purchases of medium and
high-density apartments.
* Where a contract of sale has been altered (for monetary
reasons) and not considered within the valuation report,
bankers must dispute the last valuation and upload the
amended full COS for Valuer to review (excluding when an
AVM has been completed). Refer to Disputing a Valuation.
Note: Above requirements for a physical
inspection/valuation do not apply where the
transaction is a consequence of a marital
separation or deceased estate which involves
a property transfer between the existing
mortgagors. No policy exception is required to
be recorded for this circumstance.
When a sworn valuation is obtained for a loan
with Lender’s Mortgage Insurance (LMI), the
valuation must state that the LMI provider can
rely on it. This requirement cannot be waived
at any DCA level due to the Bank’s contractual
obligations with its LMI providers.
General Insurance
Advantedge requires general insurance to
be in place on the secured property prior to
settlement, and to be maintained at all times.
Upon signing a contract of same, the
purchaser assumes the risk of any damage to
the property. The purchaser may be required
to proceed with the transaction and pay the
vendor despite damage or destruction of the
property. The purchaser should therefore insure
the property upon singing the contact of sale.
Brokers must:
• Ensure insurance cover held over assets
being provided as security and with an
insurer approved by the Advantedge prior
to drawdown.
• Collect evidence of insurance for new
property (i.e. new mortgage being taken)
- excluding vacant land and strata title
property* security.
• Refer to the Construction Loans section
for insurance requirements for properties
under construction.
Note:
• *Strata Corporations/Body Corporations
are required to hold buildings insurance
as part of each state/territory legislative
requirements - a copy of the master
insurance policy covering the strata
property is not required to be held
by Advantedge
• For land only properties, no evidence of
insurance is required.
Brokers must obtain one of the following
acceptable verification documents to evidence
insurance cover is held:
• Building insurance policy;
• Certificate of Currency; or
• Invoice from the insurer accompanied by
verification of invoice payment (where
the invoice contains the full details of the
insurance cover to enable each of the
verification steps below to be completed).
Advantedge will verify the following once
acceptable evidence of insurance has been
obtained:
• The insurer is acceptable, i.e. contained
on APRA’s list of Insurers Authorised
to Conduct New or Renewal Insurance
Business in Australia;
• The settlement date precedes the insurance
expiry date;
• At least one mortgagor is recorded as an
insured party; and
• The property is identified and the location
matches records held (exception: for
construction loans, blanket insurance
policies are acceptable if all conditions
are met)
• AFSH Nominees Pty Ltd must be noted as
having an interest as mortgagee and noted
on the policy for properties with a market
value over $2 million.
For information related to co-insurance (where
two or more insurance policies covering the
same security, or the requirements for home
insurance claims to rebuilt – contact your BDM
for guidance.
/ 14Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Lenders Mortgage
Insurance (LMI)
Any loan greater than 80% LVR (subject to
security location) must carry 100% Lenders
Mortgage Insurance (’LMI’) as provided by
a Lenders Mortgage Insurer nominated at
the sole discretion of Advantedge. Lenders
mortgage insurance companies approved by
Advantedge are Genworth Financial Mortgage
Insurance Pty Ltd (Genworth) and QBE LMI
Mortgage Insurance Limited (QBE). Some
conditions apply.
LMI and LMI approval is not required for loans
where the LVR is ≤80%, unless the security
property is located within an ‘Inner City
postcode’ as determined by the post code tool
and the loan purpose is for investment in which
case LMI and LMI approval are required where
the LVR is >70%.
The borrower is required to pay the LMI
premium.
Advantedge will allow the LMI premium to be
capitalised to the loan facility subject to:
1. The base loan facility amount must not
exceed the applicable LVR limit; AND
2. The total loan facility must not exceed the
following LVRs:
95%
(including LMI
capitalisation)
For owner occupier
purchase (including
vacant land) on a
principal and interest
repayment type only,
excluding construction.
90% (plus LMI
capitalisation)
For all other owner
occupier loans, including
refinances on a principal
and interest repayment
type only.
90%
(including LMI
capitalisation)
For investment and
construction purposes.
90% (excluding
the portion
of LMI which
relates solely to
the top up)
Where the borrowing
relates to a top up on an
existing owner-occupied
facility
Advantedge’s Loan Submission Summary form
and Application form must nominate that the
borrower/s wish to capitalise the LMI premium
to the loan facility.
1. Loan serviceability will be calculated on the
total loan facility (including the capitalised
LMI premium).
2. The borrower’s notional repayment will
be calculated on the total loan facility
(including the capitalised LMI premium).
3. The total loan facility (including the
capitalised LMI premium) must be repaid by
the set maturity date.
LMI premiums can be partially refunded where
loans are subsequently discharged within 24
months of draw down.
Application Details and
Verification
Key Requirements
• Advantedge will Complete verification for
each home loan application, including when
an application is required to be reassessed.
• Advantedge Credit must verify as
acceptable any income that is not specified
or does not meet the Requirements outlined
in this Policy, and review documents
accepted for validation if relied on for debt
servicing purposes.
• All income required to meet servicing in the
customers application must be verified.
• Customers assets and all liabilities which
must be captured in the customers
application using the prescribed loan
repayment calculations.
• Capture the customers general living and
entertainment expenses using the Living
Expense Worksheet (or equivalent) and
ensure the higher of the declared expenses
or HEM are used.
• Appropriate income shading and income
caps are applied to assess capacity to
service the proposed loan.
• The security value has been confirmed by a
valuation as instructed by the Decision Tool
or valuation policy.
• Advantedge must record any details of their
income calculations within the origination
system or equivalent.
• Income must be captured as gross income.
• All verification documents must meet
criteria as outline in ‘verification documents
requirements’.
• All verified information must match
the details in the origination system or
equivalent unless within an allowable
tolerance as outlined in ‘when to reassess
an application’.
• Applications paused by the Fraud Team for
review must not progress until guidance has
been provided by fraud operations.
Serviceability
• You may use the Advantedge Serviceability
Calculator to undertake a preliminary
assessment of the borrower’s loan
serviceability for new lending.
• You must use the Advantedge Serviceability
Calculator to undertake as assessment of
the borrower’s loan serviceability for all loan
variations. Acceptable loans must have a
positive Serviceability result.
• Where the applicant(s) have joint
commitments with other parties who are
not included in this application, 100%
of the commitment is to be used in
serviceability calculations.
• Where the applicant(s) have joint
investment property income with other
parties who are not included in this
application, 100% of the income generated
from the investment property may be used
in serviceability calculations. Where 100%
of income has been used, 100% of related
investment property expenses must also
be captured.
• Advantedge may consider including
deductible interest when calculating
servicing capacity for a loan application.
Where this is applied, the following must
be considered:
– The amount of deductible interest to
be used for servicing calculation must
not exceed total taxable income from
all sources.
– LMI insurer policies must be complied
with where the loan application requires
LMI cover.
IMPORTANT: The serviceability calculator
serves as a guide only. Your responsible lending
obligations require that you do not provide
credit assistance where a loan is unsuitable.
You must make your own assessment about
each applicant’s financial circumstances based
on the reasonable enquiries you make.
Lending Guidelines Manual
Lenders Mortgage
Insurance (LMI)
Any loan greater than 80% LVR (subject to
security location) must carry 100% Lenders
Mortgage Insurance (’LMI’) as provided by
a Lenders Mortgage Insurer nominated at
the sole discretion of Advantedge. Lenders
mortgage insurance companies approved by
Advantedge are Genworth Financial Mortgage
Insurance Pty Ltd (Genworth) and QBE LMI
Mortgage Insurance Limited (QBE). Some
conditions apply.
LMI and LMI approval is not required for loans
where the LVR is ≤80%, unless the security
property is located within an ‘Inner City
postcode’ as determined by the post code tool
and the loan purpose is for investment in which
case LMI and LMI approval are required where
the LVR is >70%.
The borrower is required to pay the LMI
premium.
Advantedge will allow the LMI premium to be
capitalised to the loan facility subject to:
1. The base loan facility amount must not
exceed the applicable LVR limit; AND
2. The total loan facility must not exceed the
following LVRs:
95%
(including LMI
capitalisation)
For owner occupier
purchase (including
vacant land) on a
principal and interest
repayment type only,
excluding construction.
90% (plus LMI
capitalisation)
For all other owner
occupier loans, including
refinances on a principal
and interest repayment
type only.
90%
(including LMI
capitalisation)
For investment and
construction purposes.
90% (excluding
the portion
of LMI which
relates solely to
the top up)
Where the borrowing
relates to a top up on an
existing owner-occupied
facility
Advantedge’s Loan Submission Summary form
and Application form must nominate that the
borrower/s wish to capitalise the LMI premium
to the loan facility.
1. Loan serviceability will be calculated on the
total loan facility (including the capitalised
LMI premium).
2. The borrower’s notional repayment will
be calculated on the total loan facility
(including the capitalised LMI premium).
3. The total loan facility (including the
capitalised LMI premium) must be repaid by
the set maturity date.
LMI premiums can be partially refunded where
loans are subsequently discharged within 24
months of draw down.
Application Details and
Verification
Key Requirements
• Advantedge will Complete verification for
each home loan application, including when
an application is required to be reassessed.
• Advantedge Credit must verify as
acceptable any income that is not specified
or does not meet the Requirements outlined
in this Policy, and review documents
accepted for validation if relied on for debt
servicing purposes.
• All income required to meet servicing in the
customers application must be verified.
• Customers assets and all liabilities which
must be captured in the customers
application using the prescribed loan
repayment calculations.
• Capture the customers general living and
entertainment expenses using the Living
Expense Worksheet (or equivalent) and
ensure the higher of the declared expenses
or HEM are used.
• Appropriate income shading and income
caps are applied to assess capacity to
service the proposed loan.
• The security value has been confirmed by a
valuation as instructed by the Decision Tool
or valuation policy.
• Advantedge must record any details of their
income calculations within the origination
system or equivalent.
• Income must be captured as gross income.
• All verification documents must meet
criteria as outline in ‘verification documents
requirements’.
• All verified information must match
the details in the origination system or
equivalent unless within an allowable
tolerance as outlined in ‘when to reassess
an application’.
• Applications paused by the Fraud Team for
review must not progress until guidance has
been provided by fraud operations.
Serviceability
• You may use the Advantedge Serviceability
Calculator to undertake a preliminary
assessment of the borrower’s loan
serviceability for new lending.
• You must use the Advantedge Serviceability
Calculator to undertake as assessment of
the borrower’s loan serviceability for all loan
variations. Acceptable loans must have a
positive Serviceability result.
• Where the applicant(s) have joint
commitments with other parties who are
not included in this application, 100%
of the commitment is to be used in
serviceability calculations.
• Where the applicant(s) have joint
investment property income with other
parties who are not included in this
application, 100% of the income generated
from the investment property may be used
in serviceability calculations. Where 100%
of income has been used, 100% of related
investment property expenses must also
be captured.
• Advantedge may consider including
deductible interest when calculating
servicing capacity for a loan application.
Where this is applied, the following must
be considered:
– The amount of deductible interest to
be used for servicing calculation must
not exceed total taxable income from
all sources.
– LMI insurer policies must be complied
with where the loan application requires
LMI cover.
IMPORTANT: The serviceability calculator
serves as a guide only. Your responsible lending
obligations require that you do not provide
credit assistance where a loan is unsuitable.
You must make your own assessment about
each applicant’s financial circumstances based
on the reasonable enquiries you make.
/ 15Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
VERIFICATION CATEGORY WHEN IT IS REQUIRED
Income • All applications
• Secondary verification is not required for loans which meet the criteria
for low risk refinances
Expense
Undisclosed Liabilities
Loan Repayments
Employment • New to Advantedge (excluding low risk refinances/limit increases) and
Lenders Mortgage Insurance Applications
Loan Purpose/Cash out verification document • LVR over 90%; or
• LVR over 80% and cash out above $100,000
A note detailing the cash out purpose is required for all cash out
requests.
Liabilities & Repayment History • Required for all refinance loans
Genuine Contributions • All loans above 90% LVR
Home Guarantee Scheme - Government Guarantee • All loans which are supported by a Government Home Guarantee
Scheme
• All Family Home Guarantee Loans supported by a Government
Guarantee
Repayment at retirement • All loans that will expire after planned retirement age, or after they
turn 70 years of age; and
• Verify the retirement strategy, if retirement is imminent.
• Secondary verification is not required for loan which meet the criteria
for low risk refinances.
Verification Document Criteria
Verification documents must meet the
following criteria:
• Appear genuine;
• Provide the details required to verify in
accordance with the verification type; and
• Must meet all the below minimum
document standards,
– Details/amount being verified match the
details in the origination system within
the allowable tolerance levels – refer
Reassessing an application
– For PAYG income, as at application
submission date*, the most recent
payment/payslip date must be:
• No older than 45 days for weekly/
fortnightly/bi-monthly/monthly
payments; or
• No older than 90 days for payments
greater than monthly.
– For all other verification, as at the
application submission date*, the most
recently issued credit/s or document/s
used for verification must be:
• No older than 90 days; or
• No older than 12 months for income
payment/s made or documents issued;
quarterly or greater, unless specifically
stated in other sections of policy;
• The most recent tax return must be no
older than 24 months when used for
verification purposes, excluding where
utilised for self-employed income
Where financial statements are provided to
verify self-employed income the most recent
financials as at the application submission
date, must be no older than
• 21 months; or
• 24 months for non-trading entities
– Clearly identify both the issuer of the
document and the Customer/Guarantor,
excluding rental appraisals which may not
be addressed to a specific customer.
– Either an original typed copy or
an electronic copy of the required
verification document.
– Not be handwritten unless a
corresponding account credit can be
reconciled.
– Where in the form of a letter, it must
clearly identify the customer and the
issuer such as the company or individual.
– Not have Tax File Numbers (TFNs) present
(redacted).
– Not appear to be altered, tampered with
or forged in any way.
Refer to the Document Verification
Requirements checklist for list of
recommended documents to be obtained to
verify income sources.
Employment Income
• All Employment income must be verified
using account credits or a payslip as the
primary document with the exclusion of:
– Recently commenced employment where
the customer has not had two pay cycles
– Return to work employment
– Defence force reserves
– Family Business
– Companies who produce Annual Reports
• Different income types have specific
verification periods and may require income
shading as specified in the following table:
Lending Guidelines Manual
VERIFICATION CATEGORY WHEN IT IS REQUIRED
Income • All applications
• Secondary verification is not required for loans which meet the criteria
for low risk refinances
Expense
Undisclosed Liabilities
Loan Repayments
Employment • New to Advantedge (excluding low risk refinances/limit increases) and
Lenders Mortgage Insurance Applications
Loan Purpose/Cash out verification document • LVR over 90%; or
• LVR over 80% and cash out above $100,000
A note detailing the cash out purpose is required for all cash out
requests.
Liabilities & Repayment History • Required for all refinance loans
Genuine Contributions • All loans above 90% LVR
Home Guarantee Scheme - Government Guarantee • All loans which are supported by a Government Home Guarantee
Scheme
• All Family Home Guarantee Loans supported by a Government
Guarantee
Repayment at retirement • All loans that will expire after planned retirement age, or after they
turn 70 years of age; and
• Verify the retirement strategy, if retirement is imminent.
• Secondary verification is not required for loan which meet the criteria
for low risk refinances.
Verification Document Criteria
Verification documents must meet the
following criteria:
• Appear genuine;
• Provide the details required to verify in
accordance with the verification type; and
• Must meet all the below minimum
document standards,
– Details/amount being verified match the
details in the origination system within
the allowable tolerance levels – refer
Reassessing an application
– For PAYG income, as at application
submission date*, the most recent
payment/payslip date must be:
• No older than 45 days for weekly/
fortnightly/bi-monthly/monthly
payments; or
• No older than 90 days for payments
greater than monthly.
– For all other verification, as at the
application submission date*, the most
recently issued credit/s or document/s
used for verification must be:
• No older than 90 days; or
• No older than 12 months for income
payment/s made or documents issued;
quarterly or greater, unless specifically
stated in other sections of policy;
• The most recent tax return must be no
older than 24 months when used for
verification purposes, excluding where
utilised for self-employed income
Where financial statements are provided to
verify self-employed income the most recent
financials as at the application submission
date, must be no older than
• 21 months; or
• 24 months for non-trading entities
– Clearly identify both the issuer of the
document and the Customer/Guarantor,
excluding rental appraisals which may not
be addressed to a specific customer.
– Either an original typed copy or
an electronic copy of the required
verification document.
– Not be handwritten unless a
corresponding account credit can be
reconciled.
– Where in the form of a letter, it must
clearly identify the customer and the
issuer such as the company or individual.
– Not have Tax File Numbers (TFNs) present
(redacted).
– Not appear to be altered, tampered with
or forged in any way.
Refer to the Document Verification
Requirements checklist for list of
recommended documents to be obtained to
verify income sources.
Employment Income
• All Employment income must be verified
using account credits or a payslip as the
primary document with the exclusion of:
– Recently commenced employment where
the customer has not had two pay cycles
– Return to work employment
– Defence force reserves
– Family Business
– Companies who produce Annual Reports
• Different income types have specific
verification periods and may require income
shading as specified in the following table:
/ 16Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
INCOME TYPE VERIFICATION PERIOD INCOME SHADING
• Full Time/Part Time Minimum 2 pay cycles No Shading
• Full Time/Part Time inclusive of all allowances and overtime
Eligible occupations:
• Ambulance Officer
Minimum 180 days
• Firefighter
• Nurse/Midwife
• Paramedic
• Police
• Boarder Force
• Protective Services Officer
• Medical and Health Professionals – refer below for list of professions
• Casual
• Defence Reserves
• Commission
• Overtime
Minimum 180 days Decision Tools will automatically apply
shading to the amount due to the uncertain
nature of these income types as appropriate in
the debt servicing.• Bonus Income Minimum 24 months
Permanent Full Time/
Part Time Income
Definition: The income individuals receive
from salary and wages is usually paid during
the year under the pay as you go (PAYG)
withholding system, and includes customers
working for a family business who are not
defined as ‘Self-Employed’
• Advantedge must verify the customer’s
income using documents that meet the
Verification Document Criteria or internal
system/s which confirms the customer has
received a minimum of two payments from
their employer.
• Where the payments verified are for
different payment values, the lowest of the
two payments must be used.
Refer to the Document Verification
Requirements checklist for additional
information. Where customer’s salary and
wages is derived from the following eligible
occupations: Ambulance Officer, Fire fighter,
Nurse/Midwife, Paramedic,Police, Protective
Service Officers, Border Security.
Medical and Health Professionals include:
Medical Practitioner Training, Anaesthetist,
Dermatologist, Emergency Medicine Specialist,
Obstetrician & Gynaecologist, Ophthalmologist,
Paediatrician, Pathologist, Specialist
Physician, Psychiatrist, Radiologist, Nurse
Educator, Nurse Researcher, Dentist, Dental
Specialist, Hospital Pharmacist, Industrial
Pharmacist, Retail Pharmacist, Occupational
Therapist, Optometrist, Physiotherapist,
Speech Pathologist, Chiropractor, Osteopath,
Podiatrist, Medical Diagnostic Radiograph,
Radiation Therapist, Nuclear Medicine
Technologist, Sonographer, Veterinarian,
Dietitian, Naturopath, Acupuncturist,
Natural Therapy Professionals, Audiologist,
Orthoptist, Orthodontist.
• Allowances and Overtime may be
considered as standard PAYG income
• Advantedge must verify a minimum of
the last 180 days of payments received.
• Input the average monthly payment
received for a minimum of the most
recent 180day period.
Directors wages exception:
The average wages received over a minimum
of the most recent 180 days may be treated as
regular PAYG income.
Bankers must:
• Verify a minimum of the last 180-days of
most recent payments received; and
• Input the verified average monthly payment
received.
Or
• Verify the directors’ wages and directors’
fees declared on their most recent personal
tax return; and
• Input the verified amount as an annual value.
Directors’ wages can be verified via the
following documents:
• ATO Income Statements
• Most recent ATO return
Director Wages paid from a trading trust ABN
are acceptable provided:
• Trustee is a corporate entity and the
applicant can be confirmed as a director via
a company search
• Verification criteria are met
Allowances
Advantedge may include Employee Allowances
as base PAYG income where the allowances:
• Are individually specified; and
• Are evident in two pay cycles; and
• Are not seasonal, temporary or short term;
and
• Do not vary by more than 20% from
the lowest amount (use the lower of the
allowance value for assessment).
Where these criteria are not met, allowances
must be treated as Uncertain Employment
Income
Advantedge must ensure they capture any
actual expenses related to these allowances in
the Customers Living Expenses
Deductions
Employee deductions removed from income
used in debt servicing do not require
further inquiry to be made where servicing
remains evident.
To add back deductions, including salary
sacrifice, to the customers base wage
Advantedge must:
• Verify the type of deduction, and where the
amount is not credited to the customer’s
account, document that there is clear
rationale as to why it is an acceptable
deduction to add back; and
• Apply tax in accordance with the below
table:
Lending Guidelines Manual
INCOME TYPE VERIFICATION PERIOD INCOME SHADING
• Full Time/Part Time Minimum 2 pay cycles No Shading
• Full Time/Part Time inclusive of all allowances and overtime
Eligible occupations:
• Ambulance Officer
Minimum 180 days
• Firefighter
• Nurse/Midwife
• Paramedic
• Police
• Boarder Force
• Protective Services Officer
• Medical and Health Professionals – refer below for list of professions
• Casual
• Defence Reserves
• Commission
• Overtime
Minimum 180 days Decision Tools will automatically apply
shading to the amount due to the uncertain
nature of these income types as appropriate in
the debt servicing.• Bonus Income Minimum 24 months
Permanent Full Time/
Part Time Income
Definition: The income individuals receive
from salary and wages is usually paid during
the year under the pay as you go (PAYG)
withholding system, and includes customers
working for a family business who are not
defined as ‘Self-Employed’
• Advantedge must verify the customer’s
income using documents that meet the
Verification Document Criteria or internal
system/s which confirms the customer has
received a minimum of two payments from
their employer.
• Where the payments verified are for
different payment values, the lowest of the
two payments must be used.
Refer to the Document Verification
Requirements checklist for additional
information. Where customer’s salary and
wages is derived from the following eligible
occupations: Ambulance Officer, Fire fighter,
Nurse/Midwife, Paramedic,Police, Protective
Service Officers, Border Security.
Medical and Health Professionals include:
Medical Practitioner Training, Anaesthetist,
Dermatologist, Emergency Medicine Specialist,
Obstetrician & Gynaecologist, Ophthalmologist,
Paediatrician, Pathologist, Specialist
Physician, Psychiatrist, Radiologist, Nurse
Educator, Nurse Researcher, Dentist, Dental
Specialist, Hospital Pharmacist, Industrial
Pharmacist, Retail Pharmacist, Occupational
Therapist, Optometrist, Physiotherapist,
Speech Pathologist, Chiropractor, Osteopath,
Podiatrist, Medical Diagnostic Radiograph,
Radiation Therapist, Nuclear Medicine
Technologist, Sonographer, Veterinarian,
Dietitian, Naturopath, Acupuncturist,
Natural Therapy Professionals, Audiologist,
Orthoptist, Orthodontist.
• Allowances and Overtime may be
considered as standard PAYG income
• Advantedge must verify a minimum of
the last 180 days of payments received.
• Input the average monthly payment
received for a minimum of the most
recent 180day period.
Directors wages exception:
The average wages received over a minimum
of the most recent 180 days may be treated as
regular PAYG income.
Bankers must:
• Verify a minimum of the last 180-days of
most recent payments received; and
• Input the verified average monthly payment
received.
Or
• Verify the directors’ wages and directors’
fees declared on their most recent personal
tax return; and
• Input the verified amount as an annual value.
Directors’ wages can be verified via the
following documents:
• ATO Income Statements
• Most recent ATO return
Director Wages paid from a trading trust ABN
are acceptable provided:
• Trustee is a corporate entity and the
applicant can be confirmed as a director via
a company search
• Verification criteria are met
Allowances
Advantedge may include Employee Allowances
as base PAYG income where the allowances:
• Are individually specified; and
• Are evident in two pay cycles; and
• Are not seasonal, temporary or short term;
and
• Do not vary by more than 20% from
the lowest amount (use the lower of the
allowance value for assessment).
Where these criteria are not met, allowances
must be treated as Uncertain Employment
Income
Advantedge must ensure they capture any
actual expenses related to these allowances in
the Customers Living Expenses
Deductions
Employee deductions removed from income
used in debt servicing do not require
further inquiry to be made where servicing
remains evident.
To add back deductions, including salary
sacrifice, to the customers base wage
Advantedge must:
• Verify the type of deduction, and where the
amount is not credited to the customer’s
account, document that there is clear
rationale as to why it is an acceptable
deduction to add back; and
• Apply tax in accordance with the below
table:
/ 17Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
DEDUCTIONS ADDED BACK FRINGE BENEFIT EXEMPT
EMPLOYEES
(AMOUNTS UP TO $970 PER
MONTH, PER ELIGIBLE FBT
EXEMPT EMPLOYER)
PUBLIC BENEVOLENT SOCIETY AND
HEALTH PROMOTION CHARITIES
FRINGE BENEFIT EXEMPT
EMPLOYEES, PUBLIC
BENEVOLENT SOCIETY, HEALTH
PROMOTION CHARITIES
• Add back the deduction
amount to the customers
gross income; and
• Tax the total gross income in
accordance with customers
individual tax rate
• Add back tax free where the
customer is eligible for a Fringe
Benefit Exemption
• $1545 per month as tax free
income (per eligible FBT exempt
employer)
• Advantedge must complete a
Charity Register Search Confirm
the charity is registered as a
Public Benevolent Society on the
Australian Charities and Not-for-
profits Commission (ACNC) (their
Public Benevolent Society status can
be located on the history page).
• Exceeding the amounts stated
in this table as tax free is
acceptable where confirmation
is held in writing from the
employer that they pay the tax
on the employee’s behalf.
In all other cases, the excess
amounts should have the customers
effective tax rate applied.
Refer to the Document Verification Requirements checklist for additional information.
Novated Leases
Where a novated lease is evident on a payslip
the following treatment must be applied:
• Lease must be captured as a liability with
the outstanding limit to ensure DTI is
captured correctly
• Pre tax deductions – Must be deducted
and does not need to be included in the
liability repayment amount
• Post tax deductions – Must be included
in the liability repayment amount but
does not need to be deducted
* If there is no post tax deduction then the
liability repayment must be input as $1
It is acceptable to have $0 for running costs in
living expenses where running costs associated
with the vehicle are included in a pre tax
deduction and this has been noted in living
expense commentary.
HECS/HELP Debt
Deductions
In most instances the HECS percentage amount
may already be included in a customer’s tax
withheld amount. Care must be taken when
reviewing the attributed taxation amount so
that it is accurately reflected.
Returning to Work
Where a customer is returning to work after
extended leave, the Advantedge must capture:
• The customers advise strategy to meet debt
servicing commitments over the period of
extended leave; and
• Obtain a letter from the customers
employer to verify the customers intended
return to work date, employment status
and salary.
Parental Leave
Customers who are about to commence, or
currently on, Parental Leave their intended
BASE PAYG income when they return to work
may be input for credit assessment.
The customer must:
• Be employed as a Permanent Full Time/Part
Time Employee; and
• Has worked for the employer for a minimum
of 12 months; and
• Advise their intended return to work
employment details after parental leave
period expires including employment status
and hours; and
• Advise how they will meet debt servicing
commitments over the period of parental
leave, in addition to the loan contract term.
Brokers must:
• Input the customers income according to their
return to work employment arrangement; and
• Ensure the Foreseeable Changes questions
are completed for customers who are about
to commence parental leave; and
• Ensure any costs associated with childcare
are considered in the customers living
expenses; and
• Verify the customers base wage (note
verification via dated payslips is acceptable
outside the standard 90-day document
validity requirement).
Refer to the Document Verification Requirements
checklist for additional information.
Casual Income, PAYG
Contract & Tax-Free
Defence Force Reserves
Advantedge must:
• Verify the average payments received for
a minimum of the most recent 180-day
period; and
• Document on the application how they
have calculated the average income amount
received.
Uncertain Employment
Income
Uncertain income is generally a variable income
source. This can be made up of individual
additional income types, or a combination
of different payment types. These income
types are required to be evidenced and
verified over an extended period compared
to standard PAYG income, and shaded due to
potential volatility.
The nature of the customer’s employment must
dictate that their income is:
• Paid as a base salary plus:
• regular overtime payments from the
same employer;
• regular inconsistent allowances (which
do not meet the allowance policy) from
the same employer; and / or
• bonus payments.
• Paid as regular commission payments
Note: Where casually employed applicants
earn overtime, the uncertain employment
income requirements must be applied to
their income.
OVERTIME, COMMISSION & INCONSISTENT ALLOWANCES BONUS PAYMENTS
• Advantedge must verify a minimum of the last 180-days of payments
received.
• Input the average monthly payment received for a minimum of the
most recent 180-day period.
• Advantedge must verify the last two years of bonus payments received.
• Input the lower of the average bonus payment received; or the most
recent financial year if the bonus payment was lower.
Lending Guidelines Manual
DEDUCTIONS ADDED BACK FRINGE BENEFIT EXEMPT
EMPLOYEES
(AMOUNTS UP TO $970 PER
MONTH, PER ELIGIBLE FBT
EXEMPT EMPLOYER)
PUBLIC BENEVOLENT SOCIETY AND
HEALTH PROMOTION CHARITIES
FRINGE BENEFIT EXEMPT
EMPLOYEES, PUBLIC
BENEVOLENT SOCIETY, HEALTH
PROMOTION CHARITIES
• Add back the deduction
amount to the customers
gross income; and
• Tax the total gross income in
accordance with customers
individual tax rate
• Add back tax free where the
customer is eligible for a Fringe
Benefit Exemption
• $1545 per month as tax free
income (per eligible FBT exempt
employer)
• Advantedge must complete a
Charity Register Search Confirm
the charity is registered as a
Public Benevolent Society on the
Australian Charities and Not-for-
profits Commission (ACNC) (their
Public Benevolent Society status can
be located on the history page).
• Exceeding the amounts stated
in this table as tax free is
acceptable where confirmation
is held in writing from the
employer that they pay the tax
on the employee’s behalf.
In all other cases, the excess
amounts should have the customers
effective tax rate applied.
Refer to the Document Verification Requirements checklist for additional information.
Novated Leases
Where a novated lease is evident on a payslip
the following treatment must be applied:
• Lease must be captured as a liability with
the outstanding limit to ensure DTI is
captured correctly
• Pre tax deductions – Must be deducted
and does not need to be included in the
liability repayment amount
• Post tax deductions – Must be included
in the liability repayment amount but
does not need to be deducted
* If there is no post tax deduction then the
liability repayment must be input as $1
It is acceptable to have $0 for running costs in
living expenses where running costs associated
with the vehicle are included in a pre tax
deduction and this has been noted in living
expense commentary.
HECS/HELP Debt
Deductions
In most instances the HECS percentage amount
may already be included in a customer’s tax
withheld amount. Care must be taken when
reviewing the attributed taxation amount so
that it is accurately reflected.
Returning to Work
Where a customer is returning to work after
extended leave, the Advantedge must capture:
• The customers advise strategy to meet debt
servicing commitments over the period of
extended leave; and
• Obtain a letter from the customers
employer to verify the customers intended
return to work date, employment status
and salary.
Parental Leave
Customers who are about to commence, or
currently on, Parental Leave their intended
BASE PAYG income when they return to work
may be input for credit assessment.
The customer must:
• Be employed as a Permanent Full Time/Part
Time Employee; and
• Has worked for the employer for a minimum
of 12 months; and
• Advise their intended return to work
employment details after parental leave
period expires including employment status
and hours; and
• Advise how they will meet debt servicing
commitments over the period of parental
leave, in addition to the loan contract term.
Brokers must:
• Input the customers income according to their
return to work employment arrangement; and
• Ensure the Foreseeable Changes questions
are completed for customers who are about
to commence parental leave; and
• Ensure any costs associated with childcare
are considered in the customers living
expenses; and
• Verify the customers base wage (note
verification via dated payslips is acceptable
outside the standard 90-day document
validity requirement).
Refer to the Document Verification Requirements
checklist for additional information.
Casual Income, PAYG
Contract & Tax-Free
Defence Force Reserves
Advantedge must:
• Verify the average payments received for
a minimum of the most recent 180-day
period; and
• Document on the application how they
have calculated the average income amount
received.
Uncertain Employment
Income
Uncertain income is generally a variable income
source. This can be made up of individual
additional income types, or a combination
of different payment types. These income
types are required to be evidenced and
verified over an extended period compared
to standard PAYG income, and shaded due to
potential volatility.
The nature of the customer’s employment must
dictate that their income is:
• Paid as a base salary plus:
• regular overtime payments from the
same employer;
• regular inconsistent allowances (which
do not meet the allowance policy) from
the same employer; and / or
• bonus payments.
• Paid as regular commission payments
Note: Where casually employed applicants
earn overtime, the uncertain employment
income requirements must be applied to
their income.
OVERTIME, COMMISSION & INCONSISTENT ALLOWANCES BONUS PAYMENTS
• Advantedge must verify a minimum of the last 180-days of payments
received.
• Input the average monthly payment received for a minimum of the
most recent 180-day period.
• Advantedge must verify the last two years of bonus payments received.
• Input the lower of the average bonus payment received; or the most
recent financial year if the bonus payment was lower.
/ 18Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Non-Employment Income Shadings
INCOME TYPE INCOME SHADING
• Investment Income
• Rental income (new, existing, and holiday/
short term or shared spaces)
Decision Tools and the Advantedge Serviceability Calculator will automatically apply shading
to the amount to cover for investment volatility and vacant tenancy as appropriate in the debt
servicing.
Australian Rental Income
Rental received from residential and
commercial investment properties in Australia
can be input for credit assessment where the
asset is owned by the applicant and listed in
their asset position.
The gross rental income used in the credit
assessment before applying any automated
or manual shading requirements must be the
lower of:
• The most recent customer provided
verifiable rental income amount; or
• The rental estimate on Advantedge ordered
valuation report (new rental only); or
• 6% of the market value of the total
Advantedge market value (where held) or
customer advised value (where Advantedge
valuation is not held) of the property per
rented dwelling (residential property only).
Where the most recent verification document
reveals different credits e.g. a transaction listing
showing two monthly payments, and these
payments vary, the lowest rental payment
should be used in the credit assessment.
Where a property address is required on a
verification, this should include the street
number and street name (including unit where
applicable) – the suburb, state and postcode
are not required.
Note: Expenses related to investment
properties must be captured as part of the
living expense conversation and recorded in
the living expense work sheet (or equivalent),
system shadings are to cover for periods of
vacant tenancy.
DEFINITION VERIFICATION DOCUMENT MUST MEET VERIFICATION DOCUMENT CRITERIA, AND:
New Rental
A new or existing property
which is not currently earning
an income.
• Must include the property address and the amount of proposed rental income.
• Be issued by registered real-estate agents on their company stationery, be a current lease agreement or be
contained in a valuation ordered by Advantedge.
• Granny flats must be confirmed via a Advantedge or external valuation report as being self-contained.
Exception: rental appraisals do not need to contain the customer’s name.
Existing Rental
A new or existing property,
which is currently earning
an income
• Be issued by their bank when confirming account income credits as rental income and confirm they have received
the rental for a minimum of:
• 2 payments; or
• 8 weeks where the property is rented privately and verified via income credits.
• Be issued by the real-estate agent or ATO. Preferred documents to verify are:
• Rental or ownership statement
• Rental ledger
• Rental property schedule contained within ITR
• Existing tenant information included within the contract of sale – must include rental amount, frequency, and
lease end date
• Be an executed lease agreement (if expired, written confirmation of extension from agent)
• Rental AVM
Note: If the above rental amount received varies on the same verification document type, use the lowest gross rental
payment in the credit assessment.
Note: Granny flats must be confirmed via an Advantedge or external valuation report as being
self-contained.
Existing Holiday Rental
Where the customer is
earning rental income from
short term letting such as a
holiday house or AIR BNB
accommodation
• Be issued by the ATO/Tax Agent or managing agent/company. It must include the property address and the
amount of rental received for a minimum of 12 months to cover periods of seasonality. This amount must be
entered as the total annual amount, and not be annualised if rented for a period of less than 12 months.
• The period must cover a full financial year, ending 30th June of the most recent financial year as at the application
submission date.
Note: Verification documents listed above are only acceptable for the year ending 30 June 2021 onwards.
Shared Spaces
Where the customer is
earning rental income from
renting part of their home
such as Room Rental.
• Be issued by the ATO/Tax Agent and include the property address and the amount of rental received. This amount
must be entered as the total annual amount, and not be annualised if rented for a period of less than 12 months.
• The period must cover a full financial year, ending 30th June of the most recent financial year as at the application
submission date.
• Advantedge must confirm the customer still currently receives the rental by confirming two recent account credits.
• The lowest amount (12-month average, or current rental amount received) must be used in the credit assessment.
Note: Verification documents listed above are only acceptable for the year ending 30 June 2021 onwards.
Lending Guidelines Manual
Non-Employment Income Shadings
INCOME TYPE INCOME SHADING
• Investment Income
• Rental income (new, existing, and holiday/
short term or shared spaces)
Decision Tools and the Advantedge Serviceability Calculator will automatically apply shading
to the amount to cover for investment volatility and vacant tenancy as appropriate in the debt
servicing.
Australian Rental Income
Rental received from residential and
commercial investment properties in Australia
can be input for credit assessment where the
asset is owned by the applicant and listed in
their asset position.
The gross rental income used in the credit
assessment before applying any automated
or manual shading requirements must be the
lower of:
• The most recent customer provided
verifiable rental income amount; or
• The rental estimate on Advantedge ordered
valuation report (new rental only); or
• 6% of the market value of the total
Advantedge market value (where held) or
customer advised value (where Advantedge
valuation is not held) of the property per
rented dwelling (residential property only).
Where the most recent verification document
reveals different credits e.g. a transaction listing
showing two monthly payments, and these
payments vary, the lowest rental payment
should be used in the credit assessment.
Where a property address is required on a
verification, this should include the street
number and street name (including unit where
applicable) – the suburb, state and postcode
are not required.
Note: Expenses related to investment
properties must be captured as part of the
living expense conversation and recorded in
the living expense work sheet (or equivalent),
system shadings are to cover for periods of
vacant tenancy.
DEFINITION VERIFICATION DOCUMENT MUST MEET VERIFICATION DOCUMENT CRITERIA, AND:
New Rental
A new or existing property
which is not currently earning
an income.
• Must include the property address and the amount of proposed rental income.
• Be issued by registered real-estate agents on their company stationery, be a current lease agreement or be
contained in a valuation ordered by Advantedge.
• Granny flats must be confirmed via a Advantedge or external valuation report as being self-contained.
Exception: rental appraisals do not need to contain the customer’s name.
Existing Rental
A new or existing property,
which is currently earning
an income
• Be issued by their bank when confirming account income credits as rental income and confirm they have received
the rental for a minimum of:
• 2 payments; or
• 8 weeks where the property is rented privately and verified via income credits.
• Be issued by the real-estate agent or ATO. Preferred documents to verify are:
• Rental or ownership statement
• Rental ledger
• Rental property schedule contained within ITR
• Existing tenant information included within the contract of sale – must include rental amount, frequency, and
lease end date
• Be an executed lease agreement (if expired, written confirmation of extension from agent)
• Rental AVM
Note: If the above rental amount received varies on the same verification document type, use the lowest gross rental
payment in the credit assessment.
Note: Granny flats must be confirmed via an Advantedge or external valuation report as being
self-contained.
Existing Holiday Rental
Where the customer is
earning rental income from
short term letting such as a
holiday house or AIR BNB
accommodation
• Be issued by the ATO/Tax Agent or managing agent/company. It must include the property address and the
amount of rental received for a minimum of 12 months to cover periods of seasonality. This amount must be
entered as the total annual amount, and not be annualised if rented for a period of less than 12 months.
• The period must cover a full financial year, ending 30th June of the most recent financial year as at the application
submission date.
Note: Verification documents listed above are only acceptable for the year ending 30 June 2021 onwards.
Shared Spaces
Where the customer is
earning rental income from
renting part of their home
such as Room Rental.
• Be issued by the ATO/Tax Agent and include the property address and the amount of rental received. This amount
must be entered as the total annual amount, and not be annualised if rented for a period of less than 12 months.
• The period must cover a full financial year, ending 30th June of the most recent financial year as at the application
submission date.
• Advantedge must confirm the customer still currently receives the rental by confirming two recent account credits.
• The lowest amount (12-month average, or current rental amount received) must be used in the credit assessment.
Note: Verification documents listed above are only acceptable for the year ending 30 June 2021 onwards.
/ 19Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Australian Government Allowances
Due to the Department of Human Services
varying eligibility criteria and means testing
associated with some payments, applications
containing selected government payments
need to be referred to a DCA holder
to consider:
• A customer’s individual circumstances
and overall strength of their application
(including assets, liabilities and, consistency
and reliability of all income including
government payments);
• Impacts that the proposed transaction
may have on their government payment
(particularly in relation to income and
asset testing);
• The intended duration of the payment and
its availability to rely on for the term of the
loan; and
• Advantedge’s responsible lending obligation
to ensure that the loan is not unsuitable.
To ensure appropriate consideration is provided
to all customers, income sources that require
manual assessment must be referred to an
Advantedge credit for a full review before a
customer is provided an outcome on their loan.
Advantedge must:
• Verify the most recent payment and
frequency using a Centrelink statement; or
• Confirm a minimum of two payments have
been received into the customers account
from a government department
• Where the payments vary by more than
20% including any allowances use the
lower of the 2 payments.
The following table outlines government
pension and payment types, whether ‘system’
or ‘manual’ credit assessment is required,
and instances where payments cannot be
considered for debt servicing:
GOVERNMENT PENSIONS
Pension Type Assessment Method
Aged Pension System Assessment
Veteran Affairs Pensions and Totally and
permanently incapacitated (TPI) pension
Disability Pension that are exempt from
asset/income test (i.e. permanent blindness)
Widower Pension
Supplement Payments (related to the above
pensions)
All Other Disability Pensions
Sickness Allowance Manual Assessment completed by Advantedge Credit due to eligibility requirements as set out by
department of human services
Other Pensions
Pension Type Assessment Method & Eligibility Criteria
Family Tax A (Single/ Couple) System Assessment when
• Customer advised age of child is before their 12th birthday.
• Family tax income is not predominant source (i.e. more than 50%).
Note: Pro Rata amount can be used for number of eligible children where benefit is paid for multiple
children but not all meet eligibility requirements.
Family Tax B (Single)
Family Tax B (Couple) System Assessment when
• Customer advised age of Child is before their 9th birthday.
• Family tax income is not predominant source (i.e. more than 50%).
Note: Pro Rata amount can be used for number of eligible children where benefit is paid for multiple
children but not all meet eligibility requirements.
Family Tax (outside above criteria) Manual Assessment completed by Advantedge Credit due to eligibility requirements as set out by
department of human services
Carers Payments
Supplement Payments (related to Payments)
Foster Care Payments
Parenting Payment
Other Government Payments
Job Seeker Not acceptable for debt assessment purpose
Austudy
Lending Guidelines Manual
Australian Government Allowances
Due to the Department of Human Services
varying eligibility criteria and means testing
associated with some payments, applications
containing selected government payments
need to be referred to a DCA holder
to consider:
• A customer’s individual circumstances
and overall strength of their application
(including assets, liabilities and, consistency
and reliability of all income including
government payments);
• Impacts that the proposed transaction
may have on their government payment
(particularly in relation to income and
asset testing);
• The intended duration of the payment and
its availability to rely on for the term of the
loan; and
• Advantedge’s responsible lending obligation
to ensure that the loan is not unsuitable.
To ensure appropriate consideration is provided
to all customers, income sources that require
manual assessment must be referred to an
Advantedge credit for a full review before a
customer is provided an outcome on their loan.
Advantedge must:
• Verify the most recent payment and
frequency using a Centrelink statement; or
• Confirm a minimum of two payments have
been received into the customers account
from a government department
• Where the payments vary by more than
20% including any allowances use the
lower of the 2 payments.
The following table outlines government
pension and payment types, whether ‘system’
or ‘manual’ credit assessment is required,
and instances where payments cannot be
considered for debt servicing:
GOVERNMENT PENSIONS
Pension Type Assessment Method
Aged Pension System Assessment
Veteran Affairs Pensions and Totally and
permanently incapacitated (TPI) pension
Disability Pension that are exempt from
asset/income test (i.e. permanent blindness)
Widower Pension
Supplement Payments (related to the above
pensions)
All Other Disability Pensions
Sickness Allowance Manual Assessment completed by Advantedge Credit due to eligibility requirements as set out by
department of human services
Other Pensions
Pension Type Assessment Method & Eligibility Criteria
Family Tax A (Single/ Couple) System Assessment when
• Customer advised age of child is before their 12th birthday.
• Family tax income is not predominant source (i.e. more than 50%).
Note: Pro Rata amount can be used for number of eligible children where benefit is paid for multiple
children but not all meet eligibility requirements.
Family Tax B (Single)
Family Tax B (Couple) System Assessment when
• Customer advised age of Child is before their 9th birthday.
• Family tax income is not predominant source (i.e. more than 50%).
Note: Pro Rata amount can be used for number of eligible children where benefit is paid for multiple
children but not all meet eligibility requirements.
Family Tax (outside above criteria) Manual Assessment completed by Advantedge Credit due to eligibility requirements as set out by
department of human services
Carers Payments
Supplement Payments (related to Payments)
Foster Care Payments
Parenting Payment
Other Government Payments
Job Seeker Not acceptable for debt assessment purpose
Austudy
/ 20Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Child Support or
Maintenance
Child support or maintenance payments should
only be included in debt servicing when they
are registered with a child support agency, and
where they are being paid for a child who is yet
to have their 13th Birthday.
Advantedge must:
• Obtain the Maintenance Agreement/Child
Support Assessment notice and:
• Ensure it is registered with the Child
Support Agency
• Verify the payment amount on the
agreement
• Verify the child’s age on the agreement
(where noted)
• Verify the customer has received a
minimum of 180 days of payments
and input the lower of the average
amount received or the amount of the
Maintenance Agreement/Child Support
Assessment notice.
• Ensure that the Maintenance/Child Support
Payments do not represent the predominant
income source of the application.
Note:
• Pro-Rata amount can be used for number
of eligible children where benefit is paid for
multiple children but not all meet eligibility
requirements.
• Payments that have been paid pursuant to
an unregistered (or private) agreement must
be confirmed by Advantedge Credit.
• Child support payments are tax free.
Investment Income
Income from the following investments can be
considered in the credit assessment when the
investment is current at the time of the credit
application, and the investment income can be
verified as received.
• Dividends from shares in a Publicly listed
company on the Australian Stock Exchange
(ASX)
• Australian Interest-bearing deposit
accounts, where a minimum of two
payments have been received
• Australian Managed Funds (which may
include international assets)
Verification must:
• confirm the amount and the frequency of
the return from the investment; and
• meet Verification Document Criteria; and
• meet requirements as outlined below:
• Interest
Bearing
Deposits; or
• Dividends
from a publicly
listed company
• Be issued by
the investment
provider, the ATO/
Tax Agent or a NAB
Financial Planner,
account credits are
acceptable where
a minimum of two
payments have been
received.
• These savings
must not be part
of the customers
contribution towards
the purchase.
Note: When inputting share dividends into the
application, franked or unfranked dividends
and franking credits may be utilised
Privately Listed Income
– Companies & Trusts
Income from the following can be considered
as investment income and shared accordingly
in the credit assessment where the investment
income can be verified as received for the prior
two financial years.
• Trusts - where the customer is not noted as
a named beneficiary
• Dividends from Private Australian Companies
Verification must:
• Be completed using documents from
the ATO or an Accountant prepared tax
return; and
• meet the document time frames as outlined
in LEN506 - Financial Statements and Debt
Servicing Analysis policy; and
• meet requirements as outlined below:
Trusts This income must
only be accepted by
minimum DCA
Level 3 who must
ensure the funds are
not used elsewhere
for debt servicing
within the aggregation
group, which may
cause hardship if not
paid to the non-named
beneficiary.
Private Australian
Companies
The lowest annual
amount received must
be used in the credit
assessment.
Note: When inputting share dividends into the
application, franked or unfranked dividends
and franking credits may be utilised
Superannuation
Income
Superannuation income qualifies when:
• The Customer is drawing income from
their superannuation fund at the time
of application and payments are regular
and stable.
Advantedge must:
• Verify the income evidenced by the two
most recent payments and ensure they
are current
• Where income drawings evidenced are
inconsistent use the lowest drawing in the
credit assessment
Foreign Source Income
• Foreign source income is any income
sourced outside of Australia.
• Advantedge does not accept foreign source
income for serviceability purposes. No
exception to this policy can be considered.
Defence Home
Ownership Subsidy
This subsidy income is acceptable for credit
assessment purposes where:
• Customers currently hold and will not
alter the eligible Defence Loan post loan
drawdown; and
• The DHOAS subsidy amount can be verified
as being received to their Home Loan
Lending Guidelines Manual
Child Support or
Maintenance
Child support or maintenance payments should
only be included in debt servicing when they
are registered with a child support agency, and
where they are being paid for a child who is yet
to have their 13th Birthday.
Advantedge must:
• Obtain the Maintenance Agreement/Child
Support Assessment notice and:
• Ensure it is registered with the Child
Support Agency
• Verify the payment amount on the
agreement
• Verify the child’s age on the agreement
(where noted)
• Verify the customer has received a
minimum of 180 days of payments
and input the lower of the average
amount received or the amount of the
Maintenance Agreement/Child Support
Assessment notice.
• Ensure that the Maintenance/Child Support
Payments do not represent the predominant
income source of the application.
Note:
• Pro-Rata amount can be used for number
of eligible children where benefit is paid for
multiple children but not all meet eligibility
requirements.
• Payments that have been paid pursuant to
an unregistered (or private) agreement must
be confirmed by Advantedge Credit.
• Child support payments are tax free.
Investment Income
Income from the following investments can be
considered in the credit assessment when the
investment is current at the time of the credit
application, and the investment income can be
verified as received.
• Dividends from shares in a Publicly listed
company on the Australian Stock Exchange
(ASX)
• Australian Interest-bearing deposit
accounts, where a minimum of two
payments have been received
• Australian Managed Funds (which may
include international assets)
Verification must:
• confirm the amount and the frequency of
the return from the investment; and
• meet Verification Document Criteria; and
• meet requirements as outlined below:
• Interest
Bearing
Deposits; or
• Dividends
from a publicly
listed company
• Be issued by
the investment
provider, the ATO/
Tax Agent or a NAB
Financial Planner,
account credits are
acceptable where
a minimum of two
payments have been
received.
• These savings
must not be part
of the customers
contribution towards
the purchase.
Note: When inputting share dividends into the
application, franked or unfranked dividends
and franking credits may be utilised
Privately Listed Income
– Companies & Trusts
Income from the following can be considered
as investment income and shared accordingly
in the credit assessment where the investment
income can be verified as received for the prior
two financial years.
• Trusts - where the customer is not noted as
a named beneficiary
• Dividends from Private Australian Companies
Verification must:
• Be completed using documents from
the ATO or an Accountant prepared tax
return; and
• meet the document time frames as outlined
in LEN506 - Financial Statements and Debt
Servicing Analysis policy; and
• meet requirements as outlined below:
Trusts This income must
only be accepted by
minimum DCA
Level 3 who must
ensure the funds are
not used elsewhere
for debt servicing
within the aggregation
group, which may
cause hardship if not
paid to the non-named
beneficiary.
Private Australian
Companies
The lowest annual
amount received must
be used in the credit
assessment.
Note: When inputting share dividends into the
application, franked or unfranked dividends
and franking credits may be utilised
Superannuation
Income
Superannuation income qualifies when:
• The Customer is drawing income from
their superannuation fund at the time
of application and payments are regular
and stable.
Advantedge must:
• Verify the income evidenced by the two
most recent payments and ensure they
are current
• Where income drawings evidenced are
inconsistent use the lowest drawing in the
credit assessment
Foreign Source Income
• Foreign source income is any income
sourced outside of Australia.
• Advantedge does not accept foreign source
income for serviceability purposes. No
exception to this policy can be considered.
Defence Home
Ownership Subsidy
This subsidy income is acceptable for credit
assessment purposes where:
• Customers currently hold and will not
alter the eligible Defence Loan post loan
drawdown; and
• The DHOAS subsidy amount can be verified
as being received to their Home Loan
/ 21Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Self Employed (Personal, Partnerships, Company, Trust)
Self Employed income is generated by:
• Sole Traders or ‘Proprietors’
• Traders as part of a business partnership
• Company Directors who also own shares
personally
• Company Directors where their spouse/
de-facto own shares
• Company Directors where they, or their
spouse/de-facto own shares through a
company or company/trust structure
• A Trustee who controls the distributions
from a trust to beneficiaries
• Named Trust Beneficiaries who receives
Trust Income Distribution/s
Advantedge Must:
• Obtain at least two consecutive years of
the most recent historical annual financial
statements (Balance Sheet and Profit & Loss
Statement) for all borrowers (& guarantors
when the debt servicing/primary exit
assessment includes guarantor income).
The most recent financial year end must not
exceed 21 months (15 months for listed &
large proprietary companies).
• Ask the customer about their financial
statements, and if their future financial
position/performance is likely to materially
deteriorate when compared with the
current income documents or financial
statement. Where the customer advises
that their future performance will
materially deteriorate, mark the application
as foreseeable changes ‘yes’ in the
origination system and in addition to their
financials obtain:
• Business Activity Statements (BAS); OR
• Transaction statements with business
income (where BAS is reported annually
or there is no GST registration)
Note: These documents must cover a minimum
of the most recent financial quarter and the
same information for the corresponding
quarter of the prior financial year.
• Only input the income into litework where
the Acceptable Financial Statements are
held (i.e. you cannot input projections)
• Input the financial information into the
Self-Employed Ready Reckoner (SERR) to
determine the income values as follows:
Two consecutive years financials held
Financials with no future deterioration
expected
• Input both years into the Self-Employed Ready Reckoner (and litework).
The customer advises that their future
financial position/performance is likely
to materially deteriorate when compared
with the current income documents or
financial statements
• Calculate the % drop between the customers BAS for the most recent quarter, and the BAS for the
same quarter of the prior financial year.
• Apply the % reduction to their most recent financials.
• Input the reduced financial information into both columns of the Self-Employed Ready Reckoner
(and litework).
• Mark foreseeable changes ‘yes’ for review by Credit.
The best indication of the customers future
servicing ability is the most recent years
performance due to a change or event
which occurred.
The use of the most recent year requires the Broker to complete financial analysis:
1. Confirm with the customer what has changed in their business when the financial statements are
reviewed.
2. Identify where the change can be identified in the financial statements.
3. Record the details of the further enquiries made by ensuring the change/event is documented and
point to where in the financials this change is evident.
Complete the additional requirements in the below table:
Sole Traders and Partnerships • Confirm the business is still trading – this must be confirmed via an ABN lookup or Business Search.
Companies • Confirm the customer is entitled to funds from the company by completing a Company or Business
Search, or their Personal tax return to confirm receipt of funds in prior financial years.
Trust • Confirm and Verify:
• If the customer is a named Beneficiary of the Trust; or
• If the customer is the Trustee of the Trust; or
• If the customer is the director and shareholder of the corporate trustee.
• Where the Customer is a Trustee and intends to increase the amount, they are currently paid as a
Beneficiary, this redirection is acceptable once bankers have made reasonable inquiries with the
trustee that this will not cause hardship to existing beneficiaries, including confirming via NAB
systems that the funds are not used elsewhere for debt servicing within the aggregation group.
Acceptable Types of Financial Statements (Self Employed Income)
The following types of financial statements outlined below are acceptable for credit assessment purposes
For trading entities:
• one year of accountant prepared annual financial statements. Plus, one year of either management or accountant prepared annual financial
statements.
For non-trading entities and individual borrowers (sole traders or individuals trading as a partnership):
Either:
• one year of accountant prepared annual financial statements. Plus, one year of either management or accountant prepared annual financial
statements or income tax returns.
OR
• One year of income tax returns with Notice of Assessment or ATO Portal confirming lodgment. Plus, one year of either management or accountant
prepared annual financial statements or income tax returns.
Lending Guidelines Manual
Self Employed (Personal, Partnerships, Company, Trust)
Self Employed income is generated by:
• Sole Traders or ‘Proprietors’
• Traders as part of a business partnership
• Company Directors who also own shares
personally
• Company Directors where their spouse/
de-facto own shares
• Company Directors where they, or their
spouse/de-facto own shares through a
company or company/trust structure
• A Trustee who controls the distributions
from a trust to beneficiaries
• Named Trust Beneficiaries who receives
Trust Income Distribution/s
Advantedge Must:
• Obtain at least two consecutive years of
the most recent historical annual financial
statements (Balance Sheet and Profit & Loss
Statement) for all borrowers (& guarantors
when the debt servicing/primary exit
assessment includes guarantor income).
The most recent financial year end must not
exceed 21 months (15 months for listed &
large proprietary companies).
• Ask the customer about their financial
statements, and if their future financial
position/performance is likely to materially
deteriorate when compared with the
current income documents or financial
statement. Where the customer advises
that their future performance will
materially deteriorate, mark the application
as foreseeable changes ‘yes’ in the
origination system and in addition to their
financials obtain:
• Business Activity Statements (BAS); OR
• Transaction statements with business
income (where BAS is reported annually
or there is no GST registration)
Note: These documents must cover a minimum
of the most recent financial quarter and the
same information for the corresponding
quarter of the prior financial year.
• Only input the income into litework where
the Acceptable Financial Statements are
held (i.e. you cannot input projections)
• Input the financial information into the
Self-Employed Ready Reckoner (SERR) to
determine the income values as follows:
Two consecutive years financials held
Financials with no future deterioration
expected
• Input both years into the Self-Employed Ready Reckoner (and litework).
The customer advises that their future
financial position/performance is likely
to materially deteriorate when compared
with the current income documents or
financial statements
• Calculate the % drop between the customers BAS for the most recent quarter, and the BAS for the
same quarter of the prior financial year.
• Apply the % reduction to their most recent financials.
• Input the reduced financial information into both columns of the Self-Employed Ready Reckoner
(and litework).
• Mark foreseeable changes ‘yes’ for review by Credit.
The best indication of the customers future
servicing ability is the most recent years
performance due to a change or event
which occurred.
The use of the most recent year requires the Broker to complete financial analysis:
1. Confirm with the customer what has changed in their business when the financial statements are
reviewed.
2. Identify where the change can be identified in the financial statements.
3. Record the details of the further enquiries made by ensuring the change/event is documented and
point to where in the financials this change is evident.
Complete the additional requirements in the below table:
Sole Traders and Partnerships • Confirm the business is still trading – this must be confirmed via an ABN lookup or Business Search.
Companies • Confirm the customer is entitled to funds from the company by completing a Company or Business
Search, or their Personal tax return to confirm receipt of funds in prior financial years.
Trust • Confirm and Verify:
• If the customer is a named Beneficiary of the Trust; or
• If the customer is the Trustee of the Trust; or
• If the customer is the director and shareholder of the corporate trustee.
• Where the Customer is a Trustee and intends to increase the amount, they are currently paid as a
Beneficiary, this redirection is acceptable once bankers have made reasonable inquiries with the
trustee that this will not cause hardship to existing beneficiaries, including confirming via NAB
systems that the funds are not used elsewhere for debt servicing within the aggregation group.
Acceptable Types of Financial Statements (Self Employed Income)
The following types of financial statements outlined below are acceptable for credit assessment purposes
For trading entities:
• one year of accountant prepared annual financial statements. Plus, one year of either management or accountant prepared annual financial
statements.
For non-trading entities and individual borrowers (sole traders or individuals trading as a partnership):
Either:
• one year of accountant prepared annual financial statements. Plus, one year of either management or accountant prepared annual financial
statements or income tax returns.
OR
• One year of income tax returns with Notice of Assessment or ATO Portal confirming lodgment. Plus, one year of either management or accountant
prepared annual financial statements or income tax returns.
/ 22Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
WHERE THE ABOVE IS NOT AVAILABLE, THE FOLLOWING REQUIREMENTS MUST BE MET:
Individuals are Partners of Tier 1 Accounting
and Legal firms
Bankers must obtain:
• Annual Distribution Advice from Tier 1 Accounting and Legal firms.
A customer is a small trading entity that
doesn’t prepare annual financial statements.
Bankers must obtain:
• Two years of Income tax returns <21 months, with NOA or ATO Portal for most recent year.
A customer is a non-trading entity that
doesn’t prepare management accounts.
Bankers must obtain:
• Two years of accountant prepared annual financial statements <24 months.
A customer has been trading for <24 months Bankers must obtain:
• Minimum 12 months of projected financial statements.
• One year of annual financial statements or if not available obtain supplementary information.
A customer is acquiring a new entity Bankers must obtain:
• Minimum 12 months of projected financial statements. Projections should be based on two years
historic financial information from previous operator and the customer’s business plan.
• NABs credit team will review and determine the appropriateness of the projections and if there is a
requirement to obtain an Independent Due Diligence report.
General Living and Entertainment Expenses (GLEE)
• Brokers must complete and comply with all requirements within the Living Expense Worksheet for all Home Lending applications, use of this
worksheet (or system equivalent) is mandatory where there is reliance on an individual’s income such as a borrower or guarantor to support
debt servicing.
• Brokers must record the customer’s post-loan expenses related to renting a property.
• Brokers must record a Minimum $500 Board or Rental expense per month per household post loan, where a customer will not live in their owner
occupied PPR home or live with their spouse/de-facto post drawdown – excluding for owner occupied construction loans.
Decision Tool (DT) Assessed All applications assessed by a DT will use the Household Expenditure Measurement (HEM) to validate
that expenses provided by the customer are realistic. DT will use the higher of customer advised
expenses or Household Expenditure Measurement (HEM) in serviceability assessment.
Where DT alerts that the customer advised expenses are less than HEM, Advantedge must make
further inquiry to ensure customer/s declared living expenses are consistent with the customer/s
circumstances and representative of their actual living expenses, Advantedge must record the
customer/s response.
Unless directed otherwise by DT or the DCA holder, no further action is required.
Manually Assessed For applications not assessed by DT, Advantedge must use the higher of the customers Declared
expenses or Household Expenditure Measurement (HEM). Where customer advised expenses are
less than HEM, Advantedge must make further inquiry to ensure customer declared living expenses
are consistent with the customer/s circumstances and representative of their actual living expenses,
Advantedge must record the customer/s response.
Where customer advised expenses are lower than HEM, Advantedge must use HEM in the
serviceability assessment.
Loan Purpose/Cash Out
Loan Purpose
The Loan Purpose ABS Code and funding requirements must be captured in the origination system, where the funds are for the purpose of a property
purchase the customers intended use of the property must also be captured
• Owner Occupied Principle Place of Residence; or
• Owner Occupied Non- Principle Place of Residence; or
• Investment
Cash Out
Cash out is defined as the total funds being released to borrowers on an uncontrolled basis. Brokers must:
• make inquires with the customer to understand the purpose of the cash out/equity release and how it meets the customers’ needs and objectives
and record a note on the application when taking a Principal and Interest, or Interest Only Loan Term Loan.
• Where the cash out is the predominant purpose of the loan, you must enter the purpose of the cash out as the loan purpose in the application.
• Where an LMI policy will be established, and the cash out is more than $100,000 or LVR exceeds 90% verify a minimum of 80% of the total funds
being released to borrowers on an uncontrolled basis using acceptable documentation.
Examples of supporting documents are:
• Builders quote
• Purchase contract
• Confirmation from a financial planner or accountant as to the intended use of funds
Lending Guidelines Manual
WHERE THE ABOVE IS NOT AVAILABLE, THE FOLLOWING REQUIREMENTS MUST BE MET:
Individuals are Partners of Tier 1 Accounting
and Legal firms
Bankers must obtain:
• Annual Distribution Advice from Tier 1 Accounting and Legal firms.
A customer is a small trading entity that
doesn’t prepare annual financial statements.
Bankers must obtain:
• Two years of Income tax returns <21 months, with NOA or ATO Portal for most recent year.
A customer is a non-trading entity that
doesn’t prepare management accounts.
Bankers must obtain:
• Two years of accountant prepared annual financial statements <24 months.
A customer has been trading for <24 months Bankers must obtain:
• Minimum 12 months of projected financial statements.
• One year of annual financial statements or if not available obtain supplementary information.
A customer is acquiring a new entity Bankers must obtain:
• Minimum 12 months of projected financial statements. Projections should be based on two years
historic financial information from previous operator and the customer’s business plan.
• NABs credit team will review and determine the appropriateness of the projections and if there is a
requirement to obtain an Independent Due Diligence report.
General Living and Entertainment Expenses (GLEE)
• Brokers must complete and comply with all requirements within the Living Expense Worksheet for all Home Lending applications, use of this
worksheet (or system equivalent) is mandatory where there is reliance on an individual’s income such as a borrower or guarantor to support
debt servicing.
• Brokers must record the customer’s post-loan expenses related to renting a property.
• Brokers must record a Minimum $500 Board or Rental expense per month per household post loan, where a customer will not live in their owner
occupied PPR home or live with their spouse/de-facto post drawdown – excluding for owner occupied construction loans.
Decision Tool (DT) Assessed All applications assessed by a DT will use the Household Expenditure Measurement (HEM) to validate
that expenses provided by the customer are realistic. DT will use the higher of customer advised
expenses or Household Expenditure Measurement (HEM) in serviceability assessment.
Where DT alerts that the customer advised expenses are less than HEM, Advantedge must make
further inquiry to ensure customer/s declared living expenses are consistent with the customer/s
circumstances and representative of their actual living expenses, Advantedge must record the
customer/s response.
Unless directed otherwise by DT or the DCA holder, no further action is required.
Manually Assessed For applications not assessed by DT, Advantedge must use the higher of the customers Declared
expenses or Household Expenditure Measurement (HEM). Where customer advised expenses are
less than HEM, Advantedge must make further inquiry to ensure customer declared living expenses
are consistent with the customer/s circumstances and representative of their actual living expenses,
Advantedge must record the customer/s response.
Where customer advised expenses are lower than HEM, Advantedge must use HEM in the
serviceability assessment.
Loan Purpose/Cash Out
Loan Purpose
The Loan Purpose ABS Code and funding requirements must be captured in the origination system, where the funds are for the purpose of a property
purchase the customers intended use of the property must also be captured
• Owner Occupied Principle Place of Residence; or
• Owner Occupied Non- Principle Place of Residence; or
• Investment
Cash Out
Cash out is defined as the total funds being released to borrowers on an uncontrolled basis. Brokers must:
• make inquires with the customer to understand the purpose of the cash out/equity release and how it meets the customers’ needs and objectives
and record a note on the application when taking a Principal and Interest, or Interest Only Loan Term Loan.
• Where the cash out is the predominant purpose of the loan, you must enter the purpose of the cash out as the loan purpose in the application.
• Where an LMI policy will be established, and the cash out is more than $100,000 or LVR exceeds 90% verify a minimum of 80% of the total funds
being released to borrowers on an uncontrolled basis using acceptable documentation.
Examples of supporting documents are:
• Builders quote
• Purchase contract
• Confirmation from a financial planner or accountant as to the intended use of funds
/ 23Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Advantedge will:
• Review the application to ensure notes are held on the application where cash out exceeds $100,000
• Complete verification where applicable for LMI applications
Note: Where the cash out/equity release is for a deposit on a future property purchase, and additional lending will be required to complete the
purchase, Brokers must complete a note to confirm how the customer can fulfil the needs and objectives of the cash out request.
Loan Repayments
Brokers must:
• Use the Advantedge’s origination systems where possible to obtain the relevant loan repayments associated with a credit application; and
• Ensure loan repayment amounts are calculated and included in credit applications for all new and existing facilities.
• For credit assessment purposes, all current liabilities and repayment amounts must be calculated and input in accordance with the table below
• Advantage Credit cannot waive the requirement to capture the customer’s liabilities in the application.
Where customers advise a liability will be paid out prior to the proposed loan drawdown or not using funds from the loan, the debt must be included in
the application and noted as payout and close, bankers must calculate and note how the debt will be paid out in the application submission notes
FACILITY TYPE LIMIT BALANCE TREATMENT
Home Loan Facilities Yes Yes Liability
For New and Existing Home Loan facilities (excluding debt/s to be paid out or refinanced)
the repayment amount is to be based on:
Principal & Interest loans The Affordability Rate on a Principal & Interest basis
over the contracted / remaining loan term
Interest Only loans The Affordability Rate on a Principal & Interest basis
over the P&I term at the expiry of the IO term
(i.e. contracted loan term less any IO term);
For other home lending facilities
(e.g.: Line of Credit loans)
The Affordability Rate on a Principal & Interest basis
over 30 years.
Note: Where the remaining contracted loan term is not known, a customer advised loan
term of up to a maximum of 20 years can be utilised to determine the Existing Loan
Repayment value used for serviceability assessment purposes. EG: If the customer has
advised the remaining loan term is 15 years, then this term must be used.
Credit Cards/Overdrafts Yes Yes Liability
For existing credit card and overdraft facilities, bankers must input a minimum monthly
repayment amount of 3.8% of the total limit.
Lending with set repayment
(e.g.: Personal Loan, long term
BNPL greater than 3 months)
Yes Yes Liability
Use contracted / actual loan repayment
Lending with no set repayment
(e.g. Unsecured LOC / Margin
Loan/ Business Loan in
Personal Name)
Yes Yes Liability
As the facility has no set repayment or repayment is unknown, must calculate the
repayment amount using the effective borrower rate.
Non- Genuine Savings
(e.g. Family loan)
No Yes Liability
Calculate loan repayment using effective borrower rate.
Note: If the customer has advised interest rate and term as well, Bankers must calculate
repayment based on the information and use the higher of customer advised or
calculated repayment.
ATO Debt Repayment Plan No Yes Liability
Use actual loan repayment as agreed with the ATO and input as ‘other’ repayment.
HECS/HELP loan Yes Yes Liability
Use customer declared limit/balance (unless information held varies from the customer
provided information) and input as liability type ‘HECS’.
Deferred Payment Facilities
The following deferred repayment facilities do not need to be recorded as a liability; the full purchase made on these facilities must be discussed and
recorded as part of your living expense conversation.
FACILITY TYPE LIMIT BALANCE TREATMENT
Post Pay Purchases (e.g. Short
term deferred payments, such
as BNPL, over maximum of
3 months)
No No Deferred Repayment, not considered a liability
Include the purchase/s that was financed via the deferred repayment/post pay service in the
customers living expense worksheet (total amount of purchase, not the repayment amount)
Charge Card (Paid in full each
month, with no limit)
No No Deferred Repayment, not considered a liability
Include the purchase/s that was financed via the charge card in the customers living expense
worksheet (Note: these facilities are paid in full each month, and cannot retain a balance)
Lending Guidelines Manual
Advantedge will:
• Review the application to ensure notes are held on the application where cash out exceeds $100,000
• Complete verification where applicable for LMI applications
Note: Where the cash out/equity release is for a deposit on a future property purchase, and additional lending will be required to complete the
purchase, Brokers must complete a note to confirm how the customer can fulfil the needs and objectives of the cash out request.
Loan Repayments
Brokers must:
• Use the Advantedge’s origination systems where possible to obtain the relevant loan repayments associated with a credit application; and
• Ensure loan repayment amounts are calculated and included in credit applications for all new and existing facilities.
• For credit assessment purposes, all current liabilities and repayment amounts must be calculated and input in accordance with the table below
• Advantage Credit cannot waive the requirement to capture the customer’s liabilities in the application.
Where customers advise a liability will be paid out prior to the proposed loan drawdown or not using funds from the loan, the debt must be included in
the application and noted as payout and close, bankers must calculate and note how the debt will be paid out in the application submission notes
FACILITY TYPE LIMIT BALANCE TREATMENT
Home Loan Facilities Yes Yes Liability
For New and Existing Home Loan facilities (excluding debt/s to be paid out or refinanced)
the repayment amount is to be based on:
Principal & Interest loans The Affordability Rate on a Principal & Interest basis
over the contracted / remaining loan term
Interest Only loans The Affordability Rate on a Principal & Interest basis
over the P&I term at the expiry of the IO term
(i.e. contracted loan term less any IO term);
For other home lending facilities
(e.g.: Line of Credit loans)
The Affordability Rate on a Principal & Interest basis
over 30 years.
Note: Where the remaining contracted loan term is not known, a customer advised loan
term of up to a maximum of 20 years can be utilised to determine the Existing Loan
Repayment value used for serviceability assessment purposes. EG: If the customer has
advised the remaining loan term is 15 years, then this term must be used.
Credit Cards/Overdrafts Yes Yes Liability
For existing credit card and overdraft facilities, bankers must input a minimum monthly
repayment amount of 3.8% of the total limit.
Lending with set repayment
(e.g.: Personal Loan, long term
BNPL greater than 3 months)
Yes Yes Liability
Use contracted / actual loan repayment
Lending with no set repayment
(e.g. Unsecured LOC / Margin
Loan/ Business Loan in
Personal Name)
Yes Yes Liability
As the facility has no set repayment or repayment is unknown, must calculate the
repayment amount using the effective borrower rate.
Non- Genuine Savings
(e.g. Family loan)
No Yes Liability
Calculate loan repayment using effective borrower rate.
Note: If the customer has advised interest rate and term as well, Bankers must calculate
repayment based on the information and use the higher of customer advised or
calculated repayment.
ATO Debt Repayment Plan No Yes Liability
Use actual loan repayment as agreed with the ATO and input as ‘other’ repayment.
HECS/HELP loan Yes Yes Liability
Use customer declared limit/balance (unless information held varies from the customer
provided information) and input as liability type ‘HECS’.
Deferred Payment Facilities
The following deferred repayment facilities do not need to be recorded as a liability; the full purchase made on these facilities must be discussed and
recorded as part of your living expense conversation.
FACILITY TYPE LIMIT BALANCE TREATMENT
Post Pay Purchases (e.g. Short
term deferred payments, such
as BNPL, over maximum of
3 months)
No No Deferred Repayment, not considered a liability
Include the purchase/s that was financed via the deferred repayment/post pay service in the
customers living expense worksheet (total amount of purchase, not the repayment amount)
Charge Card (Paid in full each
month, with no limit)
No No Deferred Repayment, not considered a liability
Include the purchase/s that was financed via the charge card in the customers living expense
worksheet (Note: these facilities are paid in full each month, and cannot retain a balance)
/ 24Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
THE BELOW ARE CONSIDERED POST PAY FACILITIES TO BE
CAPTURED AS A LIABILITY
THE BELOW ARE CONSIDERED POST PAY FACILITIES TO BE
CAPTURED WITHIN LIVING EXPENSES
Zip Money Nab Now Pay Later
Snaffle CBA Step Pay
Payright Suncorp PayLater
Humm AfterPay
Bundll PayPal in 4
Brighte Klarna
Plenti Latitude Pay
Westpac FlexiCard Wizpay
Make it Mine LayBuy
My Laybuy Pay It Later
ZestMoney Zip Pay
Zip Business Certegy
Splitit Sezzel
Art Money Inkpay
Deferit
Genoapay
Ourpay
Spot BNPL
Charge Cards (where paid in full each month)
Home Loan Repayment
Verification
Home Loan Repayment Verification
Brokers must make enquiries and provide
documentation to confirm the input of the
following details for all Home Loans external to
Advantedge:
• Loan Limit;
• Interest Rate; and
• Expiry date of the loan term OR Remaining
loan term period (excluding Line of Credit
facilities).
Where not a low risk refinance or limit increase,
Advantedge must verify the loan limit and expiry
date of the loan using a bank issued document
or a comprehensive credit report (CCR).
Verification documents must be issued by the
loan provider and meet Verification Document
Criteria. Where the loan expiry cannot be
obtained or located via comprehensive credit
reporting, serviceability must be assessed
based on the customer advised loan term of up
to a maximum of 20 years.
Refinanced Liability
Verification
Advantedge must:
• Verify liabilities and the repayment history
for all debt external to Advantedge subject
to refinance as part of the loan purpose
• Confirm that there has been no unacceptable
behaviour for the periods specified below
• Confirm that lenders details and loan/
card limit match the details in the
origination system
Verification may be completed using a
Comprehensive credit report or using Loan
or Card issuer document/s which meet
Verification Document Criteria
Minimum Verification Periods:
Credit Card 90 days/3 months; or
History since opening or
available history in CCR;
if under this period
Personal Loan/
Home Loan
180 days/6 months; or
History since opening or
available history in CCR
if under this period
Note: any periods in excess of the above do
not need to be reviewed.
Undisclosed Liabilities
Advantedge must check the following for
undisclosed debts:
• Any customer provided transaction listings
for undisclosed debt/s;
• Customers Comprehensive Credit Report
(CCR) where the origination system provides
a verification task or message code to do
so; or
• Customers Comprehensive Credit Report
(CCR) for all applications which are not
assessed by Decision Tool (DT).
Where additional debt/s are identified that
have not been included in the loan application,
Advantedge must make further inquiries as
to their status. The application must be re-
assessed where facilities are still open.
Unacceptable
Behaviours
The following behaviours are considered
unacceptable, during the verification period.
• Confirm that there has been no evidence
of bankruptcy, default, judgement or
write-offs on the customer’s credit report
– if identified, refer the application to
Credit DCA
• The loan or any other account of the
customer shows arrears of 14 plus days,
within last 90 days for credit cards and 180
days for personal loan/home loan, or history
since opening if the account has been
opened under this period – if identified,
refer the application to Credit DCA.
Lending Guidelines Manual
THE BELOW ARE CONSIDERED POST PAY FACILITIES TO BE
CAPTURED AS A LIABILITY
THE BELOW ARE CONSIDERED POST PAY FACILITIES TO BE
CAPTURED WITHIN LIVING EXPENSES
Zip Money Nab Now Pay Later
Snaffle CBA Step Pay
Payright Suncorp PayLater
Humm AfterPay
Bundll PayPal in 4
Brighte Klarna
Plenti Latitude Pay
Westpac FlexiCard Wizpay
Make it Mine LayBuy
My Laybuy Pay It Later
ZestMoney Zip Pay
Zip Business Certegy
Splitit Sezzel
Art Money Inkpay
Deferit
Genoapay
Ourpay
Spot BNPL
Charge Cards (where paid in full each month)
Home Loan Repayment
Verification
Home Loan Repayment Verification
Brokers must make enquiries and provide
documentation to confirm the input of the
following details for all Home Loans external to
Advantedge:
• Loan Limit;
• Interest Rate; and
• Expiry date of the loan term OR Remaining
loan term period (excluding Line of Credit
facilities).
Where not a low risk refinance or limit increase,
Advantedge must verify the loan limit and expiry
date of the loan using a bank issued document
or a comprehensive credit report (CCR).
Verification documents must be issued by the
loan provider and meet Verification Document
Criteria. Where the loan expiry cannot be
obtained or located via comprehensive credit
reporting, serviceability must be assessed
based on the customer advised loan term of up
to a maximum of 20 years.
Refinanced Liability
Verification
Advantedge must:
• Verify liabilities and the repayment history
for all debt external to Advantedge subject
to refinance as part of the loan purpose
• Confirm that there has been no unacceptable
behaviour for the periods specified below
• Confirm that lenders details and loan/
card limit match the details in the
origination system
Verification may be completed using a
Comprehensive credit report or using Loan
or Card issuer document/s which meet
Verification Document Criteria
Minimum Verification Periods:
Credit Card 90 days/3 months; or
History since opening or
available history in CCR;
if under this period
Personal Loan/
Home Loan
180 days/6 months; or
History since opening or
available history in CCR
if under this period
Note: any periods in excess of the above do
not need to be reviewed.
Undisclosed Liabilities
Advantedge must check the following for
undisclosed debts:
• Any customer provided transaction listings
for undisclosed debt/s;
• Customers Comprehensive Credit Report
(CCR) where the origination system provides
a verification task or message code to do
so; or
• Customers Comprehensive Credit Report
(CCR) for all applications which are not
assessed by Decision Tool (DT).
Where additional debt/s are identified that
have not been included in the loan application,
Advantedge must make further inquiries as
to their status. The application must be re-
assessed where facilities are still open.
Unacceptable
Behaviours
The following behaviours are considered
unacceptable, during the verification period.
• Confirm that there has been no evidence
of bankruptcy, default, judgement or
write-offs on the customer’s credit report
– if identified, refer the application to
Credit DCA
• The loan or any other account of the
customer shows arrears of 14 plus days,
within last 90 days for credit cards and 180
days for personal loan/home loan, or history
since opening if the account has been
opened under this period – if identified,
refer the application to Credit DCA.
/ 25Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Genuine Contributions (Genuine Savings)
Where a loan application has an LVR above 90%, Advantedge must:
• Verify a minimum 5% of purchase price as Genuine Savings/contribution customers contribution towards the purchase, without exceptions (due to
Advantedges contractual obligations with its LMI Provider)
WHAT MUST BE VERIFIED ACCEPTABLE VERIFICATION DOCUMENT/S
Genuine
Contribution
(Genuine savings)
• Equity in the residential property security or any other residential property
• Funds held in a savings account or term deposit for 90 days or more (including where these funds have then been
transferred to pay the required deposit)
• Funds accumulated in a savings account or term deposit within the last 90 days which has increased the balance
(excluding unacceptable forms of Genuine Contribution (Genuine Savings) (including where these funds have been
transferred to pay the required deposit)
• Shares held for 90 days or more as verified by a share certificate or holding statement (including deferred shares
from an employer which have vested)
• Funds held in trust, with evidence of contributions from the customer (ie transfers from a personal account or
directly credited by their employer)
• Government approved first home buyer saving schemes (ie Superannuation Salary Sacrificed contributions/First
home buyer accounts)
• Tax refunds
• Sale of Real Estate or other Asset
• Rental repayment history must be demonstrated over minimum 6 month period, verified via a Letter from the
Registered Real Estate Agent detailing the following:
– Full Name of tenant/s
– Address of the tenanted property
– Commencement date of tenancy
– Amount of rent paid per cycle (e.g. weekly, fortnightly, monthly)
– Confirmation of acceptable rental repayment history (i.e. no missed payments)
Note: Borrowed funds are not acceptable sources of genuine equity. Verification documents must be dated within
60 days of:
• The Application Submission Date; or
• The deposit payment date, where Genuine Contribution (Genuine savings) were utilised to pay the deposit prior to
application submission (ie off the plan).
Unacceptable forms of genuine savings include:
• First Home Owners Grant
• Gifts or inheritances
• Gambling proceeds
• Loan-funded deposits
• Advances on wages or commissions
• Rental discounts
• Builder or vendor discounts or finance or incentives
• Compensation
• Employer Superannuation contributions (does not include employee voluntary contributions)
• Fund held in Company/Business Trading accounts
Disclosure of equity contributions comprising the following is required:
• Gifts
• Inheritances; AND
• First Home Owners Grant (FHOG)
Where equity includes gifted funds, Advantedge must be advised of the relationship between the provider and the
borrower and whether the gift is repayable in the loan application. Where the gift is repayable, the terms of repayment
must be advised and included in servicing calculations.
Exceptions:
LMI Applicable Where LMI applies and the loan is being recontracted due to a spouse/de-facto split; Customer Contribution (Genuine
Savings) verification is not required if confirmation is held in writing from the LMI provider which details that a current
LMI policy may continue (including where a top up premium is required).
Note: In all other instances Customer Contribution (Genuine Savings) requirements must be met due to the Bank’s
contractual obligations with its LMI provider.
LMI not applicable
(i.e LVR below 80%)
Genuine Contribution (Genuine Savings) verification documents or requirements must only be waived in exceptional
circumstances by minimum DCA level 3.
Lending Guidelines Manual
Genuine Contributions (Genuine Savings)
Where a loan application has an LVR above 90%, Advantedge must:
• Verify a minimum 5% of purchase price as Genuine Savings/contribution customers contribution towards the purchase, without exceptions (due to
Advantedges contractual obligations with its LMI Provider)
WHAT MUST BE VERIFIED ACCEPTABLE VERIFICATION DOCUMENT/S
Genuine
Contribution
(Genuine savings)
• Equity in the residential property security or any other residential property
• Funds held in a savings account or term deposit for 90 days or more (including where these funds have then been
transferred to pay the required deposit)
• Funds accumulated in a savings account or term deposit within the last 90 days which has increased the balance
(excluding unacceptable forms of Genuine Contribution (Genuine Savings) (including where these funds have been
transferred to pay the required deposit)
• Shares held for 90 days or more as verified by a share certificate or holding statement (including deferred shares
from an employer which have vested)
• Funds held in trust, with evidence of contributions from the customer (ie transfers from a personal account or
directly credited by their employer)
• Government approved first home buyer saving schemes (ie Superannuation Salary Sacrificed contributions/First
home buyer accounts)
• Tax refunds
• Sale of Real Estate or other Asset
• Rental repayment history must be demonstrated over minimum 6 month period, verified via a Letter from the
Registered Real Estate Agent detailing the following:
– Full Name of tenant/s
– Address of the tenanted property
– Commencement date of tenancy
– Amount of rent paid per cycle (e.g. weekly, fortnightly, monthly)
– Confirmation of acceptable rental repayment history (i.e. no missed payments)
Note: Borrowed funds are not acceptable sources of genuine equity. Verification documents must be dated within
60 days of:
• The Application Submission Date; or
• The deposit payment date, where Genuine Contribution (Genuine savings) were utilised to pay the deposit prior to
application submission (ie off the plan).
Unacceptable forms of genuine savings include:
• First Home Owners Grant
• Gifts or inheritances
• Gambling proceeds
• Loan-funded deposits
• Advances on wages or commissions
• Rental discounts
• Builder or vendor discounts or finance or incentives
• Compensation
• Employer Superannuation contributions (does not include employee voluntary contributions)
• Fund held in Company/Business Trading accounts
Disclosure of equity contributions comprising the following is required:
• Gifts
• Inheritances; AND
• First Home Owners Grant (FHOG)
Where equity includes gifted funds, Advantedge must be advised of the relationship between the provider and the
borrower and whether the gift is repayable in the loan application. Where the gift is repayable, the terms of repayment
must be advised and included in servicing calculations.
Exceptions:
LMI Applicable Where LMI applies and the loan is being recontracted due to a spouse/de-facto split; Customer Contribution (Genuine
Savings) verification is not required if confirmation is held in writing from the LMI provider which details that a current
LMI policy may continue (including where a top up premium is required).
Note: In all other instances Customer Contribution (Genuine Savings) requirements must be met due to the Bank’s
contractual obligations with its LMI provider.
LMI not applicable
(i.e LVR below 80%)
Genuine Contribution (Genuine Savings) verification documents or requirements must only be waived in exceptional
circumstances by minimum DCA level 3.
/ 26Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
First Home Owners
Grant (FHOG) Policy
FHOG availability and conditions vary from
state to state with each Australian State and
Territory having its own rules for eligibility. To
determine the eligibility of applicants for FHOG
you will need to go to each state’s website
(links provided below).
Where Advantedge is to process a FHOG
application, the following requirements must
be met:
1. All FHOG applications must relate to
the purchase or construction of an
owner-occupied dwelling and therefore
be regulated under the National Credit
Code (NCC).
2. Advantedge will not process a FHOG
application for a non- Code regulated loan.
3. Advantedge will process FHOG applications
in accordance with Government
requirements and regulations. FHOG funds
will be made available at settlement.
4. Where FHOG funds are not available for
settlement and settlement is subsequently
delayed, Advantedge will not be liable for
any costs, penalties or losses incurred by the
borrower, as a result of the delay.
5. Where funds cannot be made available
at settlement, Advantedge will cancel the
FHOG application and borrowers must
make their own separate application to the
State Revenue Office for grant funds.
6. At the discretion of Advantedge, an amount
equivalent to the approved FHOG may be
advanced from the borrower’s approved
construction loan for use at the borrower’s
vacant land settlement. To qualify the
borrower must be a First Home Buyer who
qualifies for the government grant and
is purchasing vacant land and will obtain
construction lending approval prior to
land settlement.
7. Advantedge must apply for the grant on
behalf of the borrower and therefore the
original executed documents must be
supplied to Advantedge for processing.
8. Approval from the relevant government
body must be held at least three days
prior to the vacant loan settlement. Where
approval is not provided, Advantedge will
not advance funds and the borrower may
need to provide additional funds to settle
the vacant land.
9. Borrowers must complete and execute
the “Authority to use FHOG for payment
towards construction costs” form for this
feature to apply. This completed document
must be supplied with the loan credit
package documents.
10. Upon the first progress payment, the grant
will be released from the government body
and credited to the construction loan to
ensure adequate loans funds are held to
meet construction costs.
An extensive list of FHOG requirements,
particular to each State or Territory of Australia,
can be downloaded from the below state-
based websites:
• Australian Capital Territory:
www.revenue.act.gov.au/home-buyer-
assistance/first-home-owner-grant
• New South Wales:
www.nsw.gov.au/housing-and-
construction/first-home-buyer-grants-
and-assistance
• Northern Territory: nt.gov.au/property/
home-owner-assistance/first-home-
owners/first-home-owner-grant
• Queensland:
www.qld.gov.au/housing/buying-
owning-home/financial-help-
concessions/qld-first-home-grant
• South Australia:
www.revenuesa.sa.gov.au/
• Tasmania: www.sro.tas.gov.au/
• Victoria: www.sro.vic.gov.au/
• Western Australia: www.wa.gov.au/
organisation/department-of-finance/
fhog
First Home Owners Grant for
Construction Loans
• FHOG proceeds are not available to fund
vacant land. FHOG will only be released
during construction.
• At the discretion of Advantedge, an amount
equivalent to the approved FHOG may be
advanced from the borrower’s approved
construction loan for use at the borrower’s
vacant land settlement.
• To qualify, the borrower must be a First
Home Buyer who qualifies for the grant and
is purchasing vacant land and will obtain
construction lending approval prior to land
settlement.
For more information please refer to the
FHOG Fact Sheet & FAQs
Vacant Land Loans
• Vacant land loans are available to purchase
land for either owner occupied or
investment purposes.
• The maximum LVR is 95% (including LMI
capitalisation).
• Vacant land finance is only available on the
variable rate product.
• The valuation will be for the vacant land
only on an ‘as is’ basis.
• Advantedge offers no guarantee that it
will approve further requests for additional
funds in the future and requires full credit
information to be provided for any requests
for additional funding.
• Where existing loans/securities change
to vacant land by either substitution of
securities or subdivision of land, vacant
land/construction conditions apply. Where
the loan is not re-documented, the
Borrower’s Guide to Vacant Land and/or
Construction Funding must be issued to the
borrowers.
• FHOG proceeds are not available to fund
vacant land. Refer to FHOG Policy in
this guide.
For further details refer to the Vacant
Land and Construction Loan Fact Sheet
Construction Loans
• Construction loans are available to
purchase land, build a residential property
or renovate a residence for either owner
occupied or investment purposes.
• The maximum LVR is 90% (including LMI
capitalisation).
• Construction finance is only available on the
variable rate product.
• Construction finance is not available to
Owner Builders, a customer is considered
an owner builder when the owner of the
property under construction holds the
building licence and/or has a financial
interest in the company or business
(excluding PAYG employees) that will
complete the construction. Note: DCA
Holder approval required to consider
outside these requirements.
• Split contract, costs plus contracts and any
building contract that allows progressive
payment for construction beyond work
completed (e.g. Simple Works Contract)
are unacceptable.
• Each construction loan must only be for a
single dwelling
• Construction must be completed within
24 months of loan settlement, noting after
that time the loan will automatically convert
to a Principal and Interest loan.
• Before any construction loan approval,
all relevant construction documents as
outlined below must be provided with the
loan credit package.
(a) Before loan approval
Before loan approval is provided
for vacant land/construction loan,
Advantedge requires:
• Full copy of Contract of Sale (if
applicable);
• Copies of plans/specifications; and
• Copy of signed industry standard (such as
Master Builders Association or Housing
Industry Association) fixed price contract;
• Minimum all sections of the contract
requiring full signatures by interested
parties.
• Examples of such sections are (but not
limited to): Signature Section / Instrument
of Agreement / Acknowledgement
Section / Proof of receipt of Documents.
• Variations and/or additional legitimate
quotes for “out of contract” items (if
applicable);
• Required Insurance policies (see below)
Lending Guidelines Manual
First Home Owners
Grant (FHOG) Policy
FHOG availability and conditions vary from
state to state with each Australian State and
Territory having its own rules for eligibility. To
determine the eligibility of applicants for FHOG
you will need to go to each state’s website
(links provided below).
Where Advantedge is to process a FHOG
application, the following requirements must
be met:
1. All FHOG applications must relate to
the purchase or construction of an
owner-occupied dwelling and therefore
be regulated under the National Credit
Code (NCC).
2. Advantedge will not process a FHOG
application for a non- Code regulated loan.
3. Advantedge will process FHOG applications
in accordance with Government
requirements and regulations. FHOG funds
will be made available at settlement.
4. Where FHOG funds are not available for
settlement and settlement is subsequently
delayed, Advantedge will not be liable for
any costs, penalties or losses incurred by the
borrower, as a result of the delay.
5. Where funds cannot be made available
at settlement, Advantedge will cancel the
FHOG application and borrowers must
make their own separate application to the
State Revenue Office for grant funds.
6. At the discretion of Advantedge, an amount
equivalent to the approved FHOG may be
advanced from the borrower’s approved
construction loan for use at the borrower’s
vacant land settlement. To qualify the
borrower must be a First Home Buyer who
qualifies for the government grant and
is purchasing vacant land and will obtain
construction lending approval prior to
land settlement.
7. Advantedge must apply for the grant on
behalf of the borrower and therefore the
original executed documents must be
supplied to Advantedge for processing.
8. Approval from the relevant government
body must be held at least three days
prior to the vacant loan settlement. Where
approval is not provided, Advantedge will
not advance funds and the borrower may
need to provide additional funds to settle
the vacant land.
9. Borrowers must complete and execute
the “Authority to use FHOG for payment
towards construction costs” form for this
feature to apply. This completed document
must be supplied with the loan credit
package documents.
10. Upon the first progress payment, the grant
will be released from the government body
and credited to the construction loan to
ensure adequate loans funds are held to
meet construction costs.
An extensive list of FHOG requirements,
particular to each State or Territory of Australia,
can be downloaded from the below state-
based websites:
• Australian Capital Territory:
www.revenue.act.gov.au/home-buyer-
assistance/first-home-owner-grant
• New South Wales:
www.nsw.gov.au/housing-and-
construction/first-home-buyer-grants-
and-assistance
• Northern Territory: nt.gov.au/property/
home-owner-assistance/first-home-
owners/first-home-owner-grant
• Queensland:
www.qld.gov.au/housing/buying-
owning-home/financial-help-
concessions/qld-first-home-grant
• South Australia:
www.revenuesa.sa.gov.au/
• Tasmania: www.sro.tas.gov.au/
• Victoria: www.sro.vic.gov.au/
• Western Australia: www.wa.gov.au/
organisation/department-of-finance/
fhog
First Home Owners Grant for
Construction Loans
• FHOG proceeds are not available to fund
vacant land. FHOG will only be released
during construction.
• At the discretion of Advantedge, an amount
equivalent to the approved FHOG may be
advanced from the borrower’s approved
construction loan for use at the borrower’s
vacant land settlement.
• To qualify, the borrower must be a First
Home Buyer who qualifies for the grant and
is purchasing vacant land and will obtain
construction lending approval prior to land
settlement.
For more information please refer to the
FHOG Fact Sheet & FAQs
Vacant Land Loans
• Vacant land loans are available to purchase
land for either owner occupied or
investment purposes.
• The maximum LVR is 95% (including LMI
capitalisation).
• Vacant land finance is only available on the
variable rate product.
• The valuation will be for the vacant land
only on an ‘as is’ basis.
• Advantedge offers no guarantee that it
will approve further requests for additional
funds in the future and requires full credit
information to be provided for any requests
for additional funding.
• Where existing loans/securities change
to vacant land by either substitution of
securities or subdivision of land, vacant
land/construction conditions apply. Where
the loan is not re-documented, the
Borrower’s Guide to Vacant Land and/or
Construction Funding must be issued to the
borrowers.
• FHOG proceeds are not available to fund
vacant land. Refer to FHOG Policy in
this guide.
For further details refer to the Vacant
Land and Construction Loan Fact Sheet
Construction Loans
• Construction loans are available to
purchase land, build a residential property
or renovate a residence for either owner
occupied or investment purposes.
• The maximum LVR is 90% (including LMI
capitalisation).
• Construction finance is only available on the
variable rate product.
• Construction finance is not available to
Owner Builders, a customer is considered
an owner builder when the owner of the
property under construction holds the
building licence and/or has a financial
interest in the company or business
(excluding PAYG employees) that will
complete the construction. Note: DCA
Holder approval required to consider
outside these requirements.
• Split contract, costs plus contracts and any
building contract that allows progressive
payment for construction beyond work
completed (e.g. Simple Works Contract)
are unacceptable.
• Each construction loan must only be for a
single dwelling
• Construction must be completed within
24 months of loan settlement, noting after
that time the loan will automatically convert
to a Principal and Interest loan.
• Before any construction loan approval,
all relevant construction documents as
outlined below must be provided with the
loan credit package.
(a) Before loan approval
Before loan approval is provided
for vacant land/construction loan,
Advantedge requires:
• Full copy of Contract of Sale (if
applicable);
• Copies of plans/specifications; and
• Copy of signed industry standard (such as
Master Builders Association or Housing
Industry Association) fixed price contract;
• Minimum all sections of the contract
requiring full signatures by interested
parties.
• Examples of such sections are (but not
limited to): Signature Section / Instrument
of Agreement / Acknowledgement
Section / Proof of receipt of Documents.
• Variations and/or additional legitimate
quotes for “out of contract” items (if
applicable);
• Required Insurance policies (see below)
/ 27Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
An “As If Completed” valuation must
be completed before commencement of
building/construction works to estimate:
• the market value of the land and
proposed improvements
• the building contact is an acceptable
industry standard (e.g. Master Builders
Association or Housing Industry
Association)
• the check cost of construction using the
plans, specifications and a signed industry
standard (e.g. Master Builders Association
or Housing Industry Association) fixed
price contract (registered builder) and
• confirms the fixed price building contract
construction stage costings are within
acceptable industry standards.
The following documentation is to be
provided to the Valuer:
• a copy of signed industry standard
fixed price building contract, or formal
tender with prescribed progress payment
schedule, which is to include at a
minimum all sections of the contract
requiring full signatures by interested
parties
• Examples of such sections are (but not
limited to): Signature Section / Instrument
of Agreement / Acknowledgement
Section / Proof of receipt of Documents
• a schedule of proposed finishes and
specifications
• formal scaled plans with dimensions and
measurements
• variations and additional legitimate
quotes.
The proposed construction stage costings
must meet the following requirements,
or the Valuation report must indicate the
stage costings are reasonable for the type
of build.
• Deposit must not exceed 10% of the
total build contract
• Base and Deposit stage must not exceed
20% of the total build contract
• A minimum of 10% of the total build
contract must be retained for Practical
completion
Note: There are no restrictions on stages
in-between base and practical completion.
(b) Prior to the first progress payment
Advantedge requires the following
documentation be provided to satisfy the
Construction Conditions prior to the first
progress payment:
• A copy of the stamped Council Approved
Plans and specifications;
• A copy of the Builders Insurance of the
Work (also known as construction works)
• A copy of the Domestic/Home Warranty
Insurance
Note: There is no need for a copy of
the Builder’s Registration Certificate to
be provided. Advantedge will confirm
the builder’s registration internally by
performing a search on state government
websites which contain up-to-date
information on the builder’s registration.
Advantedge reserves the right to request
a copy of the Builder’s Registration
Certificate if required.
(c) Progress payments
Advantedge Customer Care administers
all progress payment requests. All
payment requests must be lodged with
Advantedge Customer Care no later than
3pm Melbourne time, two business days
prior to the requested payment date.
When requesting a progress payment the
following information is required:
• A valuer’s certificate (inspection report)
confirming the stage of works completed
and a ’cost-to-complete’ figure;
• The builder’s progress claim (or invoice),
showing the stage of construction that is
being claimed or a copy of the builder’s
receipt if the claim has already been paid.
The claim should include the builder’s
banking details including the account
name, BSB, and account number; AND
• An Authority to Pay signed by all
borrowers. The Authority should include
any request to pay valuer’s inspection fee.
(d) At final payment
The final progress payment can only be
advanced when Advantedge has received:
– Valuer’s certificate (inspection report)
which confirms that the property is
finished with ’NIL’ works to complete;
– Final Council approval certification
(occupancy permit) - WA excluded;
– Building insurance policy The builder’s
progress claim (or invoice), or a copy
of the builder’s receipt if the claim has
already been paid; AND
– An Authority to Pay signed by all
borrowers, which should be retained on
the Customer(s) file.
Where there are surplus funds remaining
at the completion of construction,
Advantedge, subject to the borrower’s
request, will pay these surplus funds:
– Directly into the borrower’s nominated
bank account (the one used for making
repayments); OR
– Retain surplus funds as redraw in the
borrower’s loan account.
Settlement Funds
Once Advantedge requirements have been
met, loan funds will be provided at settlement
as follows:
1. Where the loan amount is solely for the
purchase of the land Advantedge will
release the approved loan facility amount.
2. Where the loan is for the construction of
a property and the loan amount is more
than the Fixed Price Building Contract
Advantedge will retain the full amount of
the contract including variations.
3. Where the loan amount is for the
construction of a property and the loan
amount is less than the Fixed Price Building
Contract Advantedge will retain the loan
amount.
4. Where deposits have been paid Advantedge
may release up to 5% of Fixed Price
Building Contract – see Special Condition
section above.
5. Where works have commenced Advantedge
will release funds towards works completed
to date, retaining cost to complete.
Documentation noted below under
“Progress Payment Procedure” must be
provided to Advantedge Customer Care.
Special Conditions
1. Funds are provided by progressive advances
and are released on a ’cost-to-complete’
basis. Where Advantedge is not providing
all of the funds to complete construction,
the borrower’s funds must be used first.
2. Construction properties should have their
own separate Certificate of Title
3. Advantedge will allow a maximum
amount of 10% of the Fixed Price Building
Contract amount to be paid prior to the
commencement of any construction works.
– Funds can be paid direct to the builder
where the builder acknowledges that
the funds form part of the Fixed Price
Building Contract.
– Funds can be made available at land
settlement where a deposit has already
been paid to the builder. The builder
must provide Advantedge with an
acknowledgment to this affect.
4. All payment requests must be lodged with
Advantedge Construction Team no later
than 3 pm Melbourne time, two business
day prior to the requested payment date.
5. All payments are made payable to the builder,
unless otherwise authorised. Payments
cannot be made to third parties. Payment
will be banked directly into the builder’s
nominated bank account. Advantedge
Construction Team must be provided with
the builder’s banking details including;
account name, BSB and account number.
6. The usual number of progress payments
is five, however additional payments
are allowed.
7. Where the works are completed by
registered builders two progress inspections
are usually conducted. These usually occur:
– When the first progress payment is
requested;
(Note: Preparation, Deposit and Base
stages cannot exceed 20% of total
building contract costs);
– When the final progress payment is
requested.
(Note: Completion/Final stage must
represent a minimum 10% of the total
building contract costs).
Each valuer’s progress inspection report
must outline a ’cost-to-complete’ figure for
the dwelling. Funds will be released in line
with the valuer’s progress inspection report.
8. Progress inspection fees can be, but are
not required to be, paid to the valuer at
the time the progress payment is made.
Advantedge Construction Team must
be provided with the valuer’s banking
details including; account name, BSB and
account number. Any fee payment will be
deducted from the available construction
funds, which may result in reduced funds
Lending Guidelines Manual
An “As If Completed” valuation must
be completed before commencement of
building/construction works to estimate:
• the market value of the land and
proposed improvements
• the building contact is an acceptable
industry standard (e.g. Master Builders
Association or Housing Industry
Association)
• the check cost of construction using the
plans, specifications and a signed industry
standard (e.g. Master Builders Association
or Housing Industry Association) fixed
price contract (registered builder) and
• confirms the fixed price building contract
construction stage costings are within
acceptable industry standards.
The following documentation is to be
provided to the Valuer:
• a copy of signed industry standard
fixed price building contract, or formal
tender with prescribed progress payment
schedule, which is to include at a
minimum all sections of the contract
requiring full signatures by interested
parties
• Examples of such sections are (but not
limited to): Signature Section / Instrument
of Agreement / Acknowledgement
Section / Proof of receipt of Documents
• a schedule of proposed finishes and
specifications
• formal scaled plans with dimensions and
measurements
• variations and additional legitimate
quotes.
The proposed construction stage costings
must meet the following requirements,
or the Valuation report must indicate the
stage costings are reasonable for the type
of build.
• Deposit must not exceed 10% of the
total build contract
• Base and Deposit stage must not exceed
20% of the total build contract
• A minimum of 10% of the total build
contract must be retained for Practical
completion
Note: There are no restrictions on stages
in-between base and practical completion.
(b) Prior to the first progress payment
Advantedge requires the following
documentation be provided to satisfy the
Construction Conditions prior to the first
progress payment:
• A copy of the stamped Council Approved
Plans and specifications;
• A copy of the Builders Insurance of the
Work (also known as construction works)
• A copy of the Domestic/Home Warranty
Insurance
Note: There is no need for a copy of
the Builder’s Registration Certificate to
be provided. Advantedge will confirm
the builder’s registration internally by
performing a search on state government
websites which contain up-to-date
information on the builder’s registration.
Advantedge reserves the right to request
a copy of the Builder’s Registration
Certificate if required.
(c) Progress payments
Advantedge Customer Care administers
all progress payment requests. All
payment requests must be lodged with
Advantedge Customer Care no later than
3pm Melbourne time, two business days
prior to the requested payment date.
When requesting a progress payment the
following information is required:
• A valuer’s certificate (inspection report)
confirming the stage of works completed
and a ’cost-to-complete’ figure;
• The builder’s progress claim (or invoice),
showing the stage of construction that is
being claimed or a copy of the builder’s
receipt if the claim has already been paid.
The claim should include the builder’s
banking details including the account
name, BSB, and account number; AND
• An Authority to Pay signed by all
borrowers. The Authority should include
any request to pay valuer’s inspection fee.
(d) At final payment
The final progress payment can only be
advanced when Advantedge has received:
– Valuer’s certificate (inspection report)
which confirms that the property is
finished with ’NIL’ works to complete;
– Final Council approval certification
(occupancy permit) - WA excluded;
– Building insurance policy The builder’s
progress claim (or invoice), or a copy
of the builder’s receipt if the claim has
already been paid; AND
– An Authority to Pay signed by all
borrowers, which should be retained on
the Customer(s) file.
Where there are surplus funds remaining
at the completion of construction,
Advantedge, subject to the borrower’s
request, will pay these surplus funds:
– Directly into the borrower’s nominated
bank account (the one used for making
repayments); OR
– Retain surplus funds as redraw in the
borrower’s loan account.
Settlement Funds
Once Advantedge requirements have been
met, loan funds will be provided at settlement
as follows:
1. Where the loan amount is solely for the
purchase of the land Advantedge will
release the approved loan facility amount.
2. Where the loan is for the construction of
a property and the loan amount is more
than the Fixed Price Building Contract
Advantedge will retain the full amount of
the contract including variations.
3. Where the loan amount is for the
construction of a property and the loan
amount is less than the Fixed Price Building
Contract Advantedge will retain the loan
amount.
4. Where deposits have been paid Advantedge
may release up to 5% of Fixed Price
Building Contract – see Special Condition
section above.
5. Where works have commenced Advantedge
will release funds towards works completed
to date, retaining cost to complete.
Documentation noted below under
“Progress Payment Procedure” must be
provided to Advantedge Customer Care.
Special Conditions
1. Funds are provided by progressive advances
and are released on a ’cost-to-complete’
basis. Where Advantedge is not providing
all of the funds to complete construction,
the borrower’s funds must be used first.
2. Construction properties should have their
own separate Certificate of Title
3. Advantedge will allow a maximum
amount of 10% of the Fixed Price Building
Contract amount to be paid prior to the
commencement of any construction works.
– Funds can be paid direct to the builder
where the builder acknowledges that
the funds form part of the Fixed Price
Building Contract.
– Funds can be made available at land
settlement where a deposit has already
been paid to the builder. The builder
must provide Advantedge with an
acknowledgment to this affect.
4. All payment requests must be lodged with
Advantedge Construction Team no later
than 3 pm Melbourne time, two business
day prior to the requested payment date.
5. All payments are made payable to the builder,
unless otherwise authorised. Payments
cannot be made to third parties. Payment
will be banked directly into the builder’s
nominated bank account. Advantedge
Construction Team must be provided with
the builder’s banking details including;
account name, BSB and account number.
6. The usual number of progress payments
is five, however additional payments
are allowed.
7. Where the works are completed by
registered builders two progress inspections
are usually conducted. These usually occur:
– When the first progress payment is
requested;
(Note: Preparation, Deposit and Base
stages cannot exceed 20% of total
building contract costs);
– When the final progress payment is
requested.
(Note: Completion/Final stage must
represent a minimum 10% of the total
building contract costs).
Each valuer’s progress inspection report
must outline a ’cost-to-complete’ figure for
the dwelling. Funds will be released in line
with the valuer’s progress inspection report.
8. Progress inspection fees can be, but are
not required to be, paid to the valuer at
the time the progress payment is made.
Advantedge Construction Team must
be provided with the valuer’s banking
details including; account name, BSB and
account number. Any fee payment will be
deducted from the available construction
funds, which may result in reduced funds
/ 28Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
available to meet the builder’s claim. The
borrower is responsible for any shortfall.
9. Borrower’s monthly repayment will be
calculated on a pro-rata basis on the funds
advanced to date and will comprise Interest-
Only until completion of the building and
when all funds have been advanced or a
maximum period of 24 months, whichever
of the two occurs first.
10. Where the borrower requires a fixed
interest rate option, a Loan Variation form
must be completed after the final progress
payment.
11. Where the loan facility is split and
Advantedge is providing all of the funds
for the construction, the construction split
portion must be equal to the full amount of
the construction contract.
12. If there are any variations to the Building
Contract, Advantedge Construction Team
must be advised. The valuer must also be
provided with full details of the variations
for comment as to their effect on the
valuation figure previously provided. No
part of the construction can be completed
on an ’owner-builder’ basis.
13. Construction must be completed within
24 months of drawdown (for new lending)
or 24 months of Construction Product
Commencement Date (for variations and
top ups to Construction Loan).
14.At 21 months where a Construction
Loan is deemed incomplete Advantedge
will make contact with the borrower to
confirm the expected completion date and
provide options should construction not
be completed at the end of the approved
construction period.
15. Where an extension of the construction
period is requested to extend the Interest
Only period, it will be subject to a Full Credit
Serviceability Assessment.
16. The Maximum Interest Only Term Extension
is 12 months, to a total Construction
Interest Only period of 36 months from
drawdown.
17. At 36 months, where build remains
incomplete customer may be subject to
Non-Monetary Default action.
Construction Loans LVR Calculation
LVRs are calculated by expressing the amount
borrowed as a percentage of the security value.
The security value for construction loans MUST
be calculated using the following figures:
• The lower of the land value shown on the
valuation OR Contract of Sale; PLUS
• The lower of improvement value shown on
the valuation OR the Fixed Price Building
Contract including any variations.
Example:
Contract/
Purchase
Price
Valuation
Land $100,000 $95,000
Improvements $200,000 $210,000
Total $300,000 $305,000
In this example the security value used by
Advantedge to calculate the LVR is $295,000.
Construction and Renovation Loans
The guidelines applicable to a construction
advance are different to those that apply
to a renovation advance. Construction will
involve structural alterations to the property
whereas renovations do not include structural
changes to the property and are usually of a
cosmetic nature.
• Examples of ’construction’ include
extensions or additions to the security
property, garages, permanent outbuildings
and in- ground swimming pools:
a) Construction will require Council
approval.
b) Construction loans will be advanced by
progress payments.
• Examples of ’renovation’ include cosmetic
items such as minor repairs, landscaping,
footpaths, painting, carpet, tiling
and furnishings:
a) Renovations do not require Council
approval.
b) Renovation loans, at the absolute
discretion of Advantedge, may be
advanced in a single lump sum to
the borrower.
Cessation of Building Activity
• If a builder has ceased work at the site,
Advantedge should be notified immediately.
• A replacement builder must be engaged
to complete the construction – completion
cannot be done on an ’owner-builder’ basis.
• The replacement Building Contract must
be provided to Advantedge and to the
valuer for comment. Subject to Advantedge
approval, progress payments will proceed as
normal, on a ’cost-to-complete’ basis.
For further details refer to the
Advantedge Vacant Land and Construction
Loan Fact Sheet.
Procedure and
Documentation
Documents to be completed by
applicant(s):
Application form containing Privacy Notice
and Consent form (in Advantedge’s approved
format). The consent provided to Advantedge
only applies to the application(s) that are
being made at the time of obtaining the
consent and remains in force until the credit
contract covered by the application is closed.
A new consent is required for any subsequent
applications for credit.
Documents to be provided with all
applications:
For the application to proceed for credit
assessment all of the applicable documents
outlined below must be provided. For detailed
documentation requirement, refer to the Loan
Application Submission Checklist.
• Loan Application Form including
Privacy Notice and Consent – Fully
completed, signed* and dated by each
applicant.
• Verification of identity PDF report
generated via IDyou – If customer has
performed ID check at Australia Post
please make note in the submission notes.
Identity documents provided must show
the customers full legal name as per the
application. ID must be valid, with exception
of Australian Passports - acceptable if
expired within the past 2 years.
• Submission Notes
– Broker Notes: with clear purpose,
direction of cash out, advice regarding
pre & post deductions and adverse
conduct.
– Copy of approved scenario exception
(if applicable)
• Income Verification Documents –
Remove all Tax File Numbers (TFNs) prior
to submission.
• Upfront Valuation – pre-ordered and
a valuation report included with credit
submission (except for pre-approvals
and construction loans if there is no
contract to build inclusive of a progress
payment schedule).
• Refinance Documents – for incoming
refinances only.
• Contract of Sale Document – for
purchases only. Not required for
pre-approvals or refinances.
• Genuine Savings (where base LVR
> 90%)
• Construction, if applicable
• Mandatory repayment at retirement
verification documents – for imminently
retiring customers.
Acceptance of
Electronic Signature for
Supporting Documents
For home lending applications and credit
verification purposes, the following
supporting documents can be accepted with
either a wet or electronic signature (using any
platform) provided that they are in the form of
an agreement/form/letter (i.e. documents
which are not deeds or statutory declarations,
in which a wet signature is required). Electronic
signing is where the document has been signed
using an imaged signature, a signature drawn
with a mouse/finger/stylus or a typed name
(where the font of the typed name is different
to the font of the document).
• Contract of sale
• Sales advice
• Real estate nomination form
• Deposit receipts
• Gift letter
• Fixed price building contract / variation
agreement of building contract
• Employment contract / letter from the
employer
• Rental/market appraisals
• Lease agreement
• Acceptable verification document from a
real estate agent
• Letters/statements from accountant or
financial planner
Lending Guidelines Manual
available to meet the builder’s claim. The
borrower is responsible for any shortfall.
9. Borrower’s monthly repayment will be
calculated on a pro-rata basis on the funds
advanced to date and will comprise Interest-
Only until completion of the building and
when all funds have been advanced or a
maximum period of 24 months, whichever
of the two occurs first.
10. Where the borrower requires a fixed
interest rate option, a Loan Variation form
must be completed after the final progress
payment.
11. Where the loan facility is split and
Advantedge is providing all of the funds
for the construction, the construction split
portion must be equal to the full amount of
the construction contract.
12. If there are any variations to the Building
Contract, Advantedge Construction Team
must be advised. The valuer must also be
provided with full details of the variations
for comment as to their effect on the
valuation figure previously provided. No
part of the construction can be completed
on an ’owner-builder’ basis.
13. Construction must be completed within
24 months of drawdown (for new lending)
or 24 months of Construction Product
Commencement Date (for variations and
top ups to Construction Loan).
14.At 21 months where a Construction
Loan is deemed incomplete Advantedge
will make contact with the borrower to
confirm the expected completion date and
provide options should construction not
be completed at the end of the approved
construction period.
15. Where an extension of the construction
period is requested to extend the Interest
Only period, it will be subject to a Full Credit
Serviceability Assessment.
16. The Maximum Interest Only Term Extension
is 12 months, to a total Construction
Interest Only period of 36 months from
drawdown.
17. At 36 months, where build remains
incomplete customer may be subject to
Non-Monetary Default action.
Construction Loans LVR Calculation
LVRs are calculated by expressing the amount
borrowed as a percentage of the security value.
The security value for construction loans MUST
be calculated using the following figures:
• The lower of the land value shown on the
valuation OR Contract of Sale; PLUS
• The lower of improvement value shown on
the valuation OR the Fixed Price Building
Contract including any variations.
Example:
Contract/
Purchase
Price
Valuation
Land $100,000 $95,000
Improvements $200,000 $210,000
Total $300,000 $305,000
In this example the security value used by
Advantedge to calculate the LVR is $295,000.
Construction and Renovation Loans
The guidelines applicable to a construction
advance are different to those that apply
to a renovation advance. Construction will
involve structural alterations to the property
whereas renovations do not include structural
changes to the property and are usually of a
cosmetic nature.
• Examples of ’construction’ include
extensions or additions to the security
property, garages, permanent outbuildings
and in- ground swimming pools:
a) Construction will require Council
approval.
b) Construction loans will be advanced by
progress payments.
• Examples of ’renovation’ include cosmetic
items such as minor repairs, landscaping,
footpaths, painting, carpet, tiling
and furnishings:
a) Renovations do not require Council
approval.
b) Renovation loans, at the absolute
discretion of Advantedge, may be
advanced in a single lump sum to
the borrower.
Cessation of Building Activity
• If a builder has ceased work at the site,
Advantedge should be notified immediately.
• A replacement builder must be engaged
to complete the construction – completion
cannot be done on an ’owner-builder’ basis.
• The replacement Building Contract must
be provided to Advantedge and to the
valuer for comment. Subject to Advantedge
approval, progress payments will proceed as
normal, on a ’cost-to-complete’ basis.
For further details refer to the
Advantedge Vacant Land and Construction
Loan Fact Sheet.
Procedure and
Documentation
Documents to be completed by
applicant(s):
Application form containing Privacy Notice
and Consent form (in Advantedge’s approved
format). The consent provided to Advantedge
only applies to the application(s) that are
being made at the time of obtaining the
consent and remains in force until the credit
contract covered by the application is closed.
A new consent is required for any subsequent
applications for credit.
Documents to be provided with all
applications:
For the application to proceed for credit
assessment all of the applicable documents
outlined below must be provided. For detailed
documentation requirement, refer to the Loan
Application Submission Checklist.
• Loan Application Form including
Privacy Notice and Consent – Fully
completed, signed* and dated by each
applicant.
• Verification of identity PDF report
generated via IDyou – If customer has
performed ID check at Australia Post
please make note in the submission notes.
Identity documents provided must show
the customers full legal name as per the
application. ID must be valid, with exception
of Australian Passports - acceptable if
expired within the past 2 years.
• Submission Notes
– Broker Notes: with clear purpose,
direction of cash out, advice regarding
pre & post deductions and adverse
conduct.
– Copy of approved scenario exception
(if applicable)
• Income Verification Documents –
Remove all Tax File Numbers (TFNs) prior
to submission.
• Upfront Valuation – pre-ordered and
a valuation report included with credit
submission (except for pre-approvals
and construction loans if there is no
contract to build inclusive of a progress
payment schedule).
• Refinance Documents – for incoming
refinances only.
• Contract of Sale Document – for
purchases only. Not required for
pre-approvals or refinances.
• Genuine Savings (where base LVR
> 90%)
• Construction, if applicable
• Mandatory repayment at retirement
verification documents – for imminently
retiring customers.
Acceptance of
Electronic Signature for
Supporting Documents
For home lending applications and credit
verification purposes, the following
supporting documents can be accepted with
either a wet or electronic signature (using any
platform) provided that they are in the form of
an agreement/form/letter (i.e. documents
which are not deeds or statutory declarations,
in which a wet signature is required). Electronic
signing is where the document has been signed
using an imaged signature, a signature drawn
with a mouse/finger/stylus or a typed name
(where the font of the typed name is different
to the font of the document).
• Contract of sale
• Sales advice
• Real estate nomination form
• Deposit receipts
• Gift letter
• Fixed price building contract / variation
agreement of building contract
• Employment contract / letter from the
employer
• Rental/market appraisals
• Lease agreement
• Acceptable verification document from a
real estate agent
• Letters/statements from accountant or
financial planner
/ 29Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Customer Acceptance
National Credit Code (NCC) regulated loan
must have loan contracts executed by all
parties within 90 days of the unconditional
approval date. Where loan contracts are not
signed within 90 days of the unconditional
approval date, a reassessment of the
application is required including:
• Collection of updated verification
documents where documents do not meet
verification document criteria; and
• Preparation and execution of new loan
contracts.
Loan Variations
(Broker Guidelines)
Loan Amount Increase
The application will be assessed by Advantedge
in the same manner as a new loan. Advantedge
must be provided with:
1. Signed and completed Loan Variation form
from all parties;
2. Updated valuation of security property
(where required); and
3. A credit package in accordance to the
requirements stipulated on the Variation
form.
Change of Loan Product Features
When borrowers wish to change their:
1. Interest rate (variable or fixed); or
2. Repayment options (Interest-Only, Principal
and Interest or Extension to Interest-
Only Period).
A serviceability assessment is required for
switching Principal & Interest loan to Interest-
Only or for an extension to Interest- Only
period. The Interest-Only Period Restrictions
detailed in section 0 will apply.
Advantedge must be provided with:
1. Signed and completed Loan Variation form
from all parties;
2. Signed Fixed Rate Authority form where a
fixed rate is requested.
3. Fixed Rate Break Cost Acknowledgement
form if a loan is to be converted from a
fixed rate facility to a variable rate facility;
4. Borrowers must be advised of the affects to
their redraw or drawdown ability;
5. Borrowers must be advised of the affects to
their repayment ability.
The date of the conversion will be at the
absolute discretion of Advantedge and subject
to receipt of all necessary documentation, as
Advantedge reasonably requires.
Split Facilities
A borrower may choose to split their facility
post settlement. Advantedge must be
provided with:
1. Signed and completed Loan Variation form
from all parties;
Borrower Changes
Additional Borrower
Advantedge must be provided with:
1. Signed and completed Loan Variation form
from all parties;
2. A credit package in accordance to
the requirements stipulated on the
Variation form
The new borrower application will be assessed
by Advantedge, and where applicable the
Lenders mortgage insurer, in the same manner
as a new loan, and the same procedure applies.
1. Where applicable a Lenders mortgage
insurance policy amendment fee may apply.
2. Existing security documentation will
be varied or new documents prepared,
depending on whether or not the loan
will be subject to the requirements of the
National Credit Code (NCC).
Borrower Release
A request to release a borrower from the
mortgage will be considered by Advantedge
if the remaining borrower(s) can demonstrate
an ongoing ability to service the loan. In some
instances the borrower may not be released
because of the relationship to the remaining
borrower or if they are a registered proprietor
of the security property.
Advantedge must be provided with:
1. Signed and completed Loan Variation form
from all parties;
2. A credit package in accordance to the
requirements stipulated on the Variation
form
Advantedge and, where applicable, the
Lenders mortgage insurer will assess the
application in the same manner as a new loan,
and the same procedure applies.
1. Where applicable a Lenders mortgage
insurance policy amendment fee may apply.
2. Existing security documentation will be
varied.
Guarantor Release
A written request to release a guarantor
will be considered by Advantedge having
regard to the original purpose for which the
guarantee was obtained, unless the guarantor
makes the request to be released before the
credit is provided or the terms of the credit
contract are materially different (in one or more
respects) from the proposed credit contract
that was provided to the guarantor before
the guarantee was signed, in which cases
Advantedge must release the guarantor.
Change of Borrower Name
When there is a change of borrower name it is
not mandatory to have security documentation
or loan records amended. Should the borrower
require security documentation to be altered,
all legal costs and disbursements are to be
borne by the borrower. Advantedge must be
provided with:
1. Signed and completed Loan Variation form
from all parties;
2. Copy of statutory name change
certification, such as Marriage Certificate or
Deed Poll.
Death of a Borrower
In the event of the death of a borrower
Advantedge requires:
1. A ’Notice of death’ and/or ’Death
Certificate’; and either
2. A ’Survivorship application’, in the case of
joint proprietors or
3. A ’Probate Grant’, and/or ’Beneficiaries
Notice of Transfer’, in cases where the
borrower was the sole proprietor.
Security Property Substitution
Borrowers who sell their security property may
be able to transfer their existing loan account
to the new property.
1. Where security property is substituted for
vacant land and loan is not re-documented,
a Guide to Construction Loans brochure
must be issued to the borrower.
2. A release of property and Security
Substitution must be simultaneous.
Advantedge no longer accepts settlement
dates that are offset of one another.
3. Where a simultaneous Security Substituition
is not available a full discharge discharge
must take place followed by a new
application of new property at a later date
via a new submission into Lodgement
System (AOL or LoanApp).
Procedures
Advantedge, and where applicable its Lenders
mortgage insurers, must assess the new
security property being substituted in the same
way as a new loan.
1. Advantedge Lending Services department
must process all Security Substitutions.
2. Brokers should provide a Loan Variation
form, valuation and supporting information,
as noted below, to the Lending Services
department clearly identified as a Security
Substitution. Where this does not happen
or the discharge area is instructed
independently by the broker, borrower or
their representative, Advantedge will take
no responsibility if the loan is inadvertently
discharged. In these circumstances, full
costs including those to reinstate the loan
facility, will be payable by the borrower.
3. Instructions from brokers must clearly
provide:
a) The date of discharge for the existing
security property;
b) The nature of the discharge either full or
partial – for all loans including splits;
c) The date of settlement for the
replacement/new security; and
d) Details of the borrower’s solicitor who is
acting on the sale and purchase of the
security properties.
4. Updated Credit Package information
should include:
a) Completed Loan Variation Summary
form;
b) A copy of the Contract of Sale for the
security property being released;
c) Valuation of the new property; and
d) Updated financial information, if required
(refer to page 30).
Lending Guidelines Manual
Customer Acceptance
National Credit Code (NCC) regulated loan
must have loan contracts executed by all
parties within 90 days of the unconditional
approval date. Where loan contracts are not
signed within 90 days of the unconditional
approval date, a reassessment of the
application is required including:
• Collection of updated verification
documents where documents do not meet
verification document criteria; and
• Preparation and execution of new loan
contracts.
Loan Variations
(Broker Guidelines)
Loan Amount Increase
The application will be assessed by Advantedge
in the same manner as a new loan. Advantedge
must be provided with:
1. Signed and completed Loan Variation form
from all parties;
2. Updated valuation of security property
(where required); and
3. A credit package in accordance to the
requirements stipulated on the Variation
form.
Change of Loan Product Features
When borrowers wish to change their:
1. Interest rate (variable or fixed); or
2. Repayment options (Interest-Only, Principal
and Interest or Extension to Interest-
Only Period).
A serviceability assessment is required for
switching Principal & Interest loan to Interest-
Only or for an extension to Interest- Only
period. The Interest-Only Period Restrictions
detailed in section 0 will apply.
Advantedge must be provided with:
1. Signed and completed Loan Variation form
from all parties;
2. Signed Fixed Rate Authority form where a
fixed rate is requested.
3. Fixed Rate Break Cost Acknowledgement
form if a loan is to be converted from a
fixed rate facility to a variable rate facility;
4. Borrowers must be advised of the affects to
their redraw or drawdown ability;
5. Borrowers must be advised of the affects to
their repayment ability.
The date of the conversion will be at the
absolute discretion of Advantedge and subject
to receipt of all necessary documentation, as
Advantedge reasonably requires.
Split Facilities
A borrower may choose to split their facility
post settlement. Advantedge must be
provided with:
1. Signed and completed Loan Variation form
from all parties;
Borrower Changes
Additional Borrower
Advantedge must be provided with:
1. Signed and completed Loan Variation form
from all parties;
2. A credit package in accordance to
the requirements stipulated on the
Variation form
The new borrower application will be assessed
by Advantedge, and where applicable the
Lenders mortgage insurer, in the same manner
as a new loan, and the same procedure applies.
1. Where applicable a Lenders mortgage
insurance policy amendment fee may apply.
2. Existing security documentation will
be varied or new documents prepared,
depending on whether or not the loan
will be subject to the requirements of the
National Credit Code (NCC).
Borrower Release
A request to release a borrower from the
mortgage will be considered by Advantedge
if the remaining borrower(s) can demonstrate
an ongoing ability to service the loan. In some
instances the borrower may not be released
because of the relationship to the remaining
borrower or if they are a registered proprietor
of the security property.
Advantedge must be provided with:
1. Signed and completed Loan Variation form
from all parties;
2. A credit package in accordance to the
requirements stipulated on the Variation
form
Advantedge and, where applicable, the
Lenders mortgage insurer will assess the
application in the same manner as a new loan,
and the same procedure applies.
1. Where applicable a Lenders mortgage
insurance policy amendment fee may apply.
2. Existing security documentation will be
varied.
Guarantor Release
A written request to release a guarantor
will be considered by Advantedge having
regard to the original purpose for which the
guarantee was obtained, unless the guarantor
makes the request to be released before the
credit is provided or the terms of the credit
contract are materially different (in one or more
respects) from the proposed credit contract
that was provided to the guarantor before
the guarantee was signed, in which cases
Advantedge must release the guarantor.
Change of Borrower Name
When there is a change of borrower name it is
not mandatory to have security documentation
or loan records amended. Should the borrower
require security documentation to be altered,
all legal costs and disbursements are to be
borne by the borrower. Advantedge must be
provided with:
1. Signed and completed Loan Variation form
from all parties;
2. Copy of statutory name change
certification, such as Marriage Certificate or
Deed Poll.
Death of a Borrower
In the event of the death of a borrower
Advantedge requires:
1. A ’Notice of death’ and/or ’Death
Certificate’; and either
2. A ’Survivorship application’, in the case of
joint proprietors or
3. A ’Probate Grant’, and/or ’Beneficiaries
Notice of Transfer’, in cases where the
borrower was the sole proprietor.
Security Property Substitution
Borrowers who sell their security property may
be able to transfer their existing loan account
to the new property.
1. Where security property is substituted for
vacant land and loan is not re-documented,
a Guide to Construction Loans brochure
must be issued to the borrower.
2. A release of property and Security
Substitution must be simultaneous.
Advantedge no longer accepts settlement
dates that are offset of one another.
3. Where a simultaneous Security Substituition
is not available a full discharge discharge
must take place followed by a new
application of new property at a later date
via a new submission into Lodgement
System (AOL or LoanApp).
Procedures
Advantedge, and where applicable its Lenders
mortgage insurers, must assess the new
security property being substituted in the same
way as a new loan.
1. Advantedge Lending Services department
must process all Security Substitutions.
2. Brokers should provide a Loan Variation
form, valuation and supporting information,
as noted below, to the Lending Services
department clearly identified as a Security
Substitution. Where this does not happen
or the discharge area is instructed
independently by the broker, borrower or
their representative, Advantedge will take
no responsibility if the loan is inadvertently
discharged. In these circumstances, full
costs including those to reinstate the loan
facility, will be payable by the borrower.
3. Instructions from brokers must clearly
provide:
a) The date of discharge for the existing
security property;
b) The nature of the discharge either full or
partial – for all loans including splits;
c) The date of settlement for the
replacement/new security; and
d) Details of the borrower’s solicitor who is
acting on the sale and purchase of the
security properties.
4. Updated Credit Package information
should include:
a) Completed Loan Variation Summary
form;
b) A copy of the Contract of Sale for the
security property being released;
c) Valuation of the new property; and
d) Updated financial information, if required
(refer to page 30).
/ 30Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
5. No further financial information is required,
where the following criteria is met:
• Existing loan product, loan term, loan
purpose and loan account to remain
unchanged
• No increase to loan amount
• No deterioration in the lending category,
outside of Lending Category A to D;
or LMI is not required (refer to Lenders
Mortgage Insurance (LMI) or waiver
approval held from minimum Level 3
DCA Holder); or if LMI is currently held,
the LVR has not increased. (Exception: If
LMI is now required for account – refer to
point 6 below for instructions)
• The valuation report and residential
security type (including Term Deposits)
are acceptable; LVR policy requirements
are met (i.e.: Restricted and Inner-
City Postcodes)
Note: For existing loan accounts with LMI,
referral to LMI Provider will be required to
determine if additional premium is payable.
6. Where the loan amount is increased, or
LMI is now required, a full Credit Package
must be provided. The application will
be considered in the same manner as a
new loan.
Property Subdivision
1. Any proposed plan of subdivision must be
reviewed and approved by Advantedge
solicitors. Advantedge may request an
updated valuation of the security property,
which must take into consideration all the
effects of the proposed subdivision on the
Advantedge security property.
2. If, after the subdivision has occurred, a
portion of the security is to be sold, a
reduction to the loan amount may be
required by Advantedge.
3. After the subdivision has occurred, if the
security property remaining is vacant land
and loan is not re-documented, a Guide
to Construction Loans brochure must be
issued to the borrower.
Further Charges – Other Lenders
For Real property (Land) Mortgages,
completion of a title search is required to
be completed, when any extension of credit
request is requested.
This is to ensure any subsequent mortgages
lodged post Advantedge mortgage registration
are identified to enable appropriate Priority
Arrangements to be put in place and/or to
ensure an accurate calculation of the Bank
Value of the Security is reflected.
Advantedge must approve and consent to
any request for a further charge (second
or subsequent mortgage) over the security
property. Where applicable, a Lenders
mortgage insurance approval is required on
all subsequent charge requests. This approval
can only be obtained by Advantedge. Fees and
Charges may apply – refer to Fees and Charges
booklet for further details.
Deed of Priority
Advantedge must ensure that AFSH Nominees
Pty Ltd (applicable for loans submitted from
31 January 2011) or Perpetual Trustees Victoria
Limited (as mortgagee) is registered as first
mortgagee and as such cannot enter into any
deed of priority, which may alter that position.
When a borrower requests a loan from
Advantedge, and where there are existing
mortgages or charges on the title, Advantedge
will require the existing mortgagee to:
1. Execute a deed of priority in favour of
AFSH Nominees Pty Ltd (applicable for
loans submitted from 31 January 2011) or
Perpetual Trustees Victoria Limited; and
2. Lift its mortgage or charge, allow our
mortgage to be registered, and then re-
register its charge; or allow the registration
of a deed of postponement to re-arrange
the rank of the mortgages as per point (a)
above.
3. When an existing borrower requests
a variation to increase their loan
with Advantedge and where there
are subsequent charges on the title,
Advantedge will require the existing
subsequent mortgagees to execute a NEW
deed of priority in favour AFSH Nominees
Pty Ltd (applicable for loans submitted from
31 January 2011) or Perpetual Trustees
Victoria Limited.
Fees and Charges may apply – refer to Fees and
Charges booklet for further details.
Notice of Charge Received Prior to
Settlement
1. Advantedge Lending Services department
must be provided with details of the
proposed charge, including at least the
following information:
a) Details of the subsequent lender;
b) The amount of the further charge;
c) The term of the facility to be provided by
the other lender;
d) The repayment amounts and interest rate
applicable; and
e) Where possible, the purpose of the
advance.
2. Advantedge will arrange for the production
of the title documents to the appropriate
Advantedge settlement agent. A production
fee is payable.
3. The borrower’s solicitor or financier will
be advised by Advantedge of the consent,
and the name of the relevant Advantedge
settlement agent.
Notice of Charge Received Post
Settlement
1. Advantedge Customer Care must be
provided with details of the proposed
charge, including at least the following
information:
a) Details of the subsequent lender;
b) The amount of the further charge;
c) The term of the facility to be provided by
the other lender;
d) The repayment amounts and interest rate
applicable; and
e) Where possible, the purpose of the
advance.
2. Advantedge will arrange for the production
of the title documents to the appropriate
Advantedge settlement agent. A production
fee is applicable.
Post Settlement Requests and
Powers of Attorney
Where a post settlement request has been
signed under a power of attorney and
Advantedge does not already hold a copy of
the power of attorney on file, a copy of the
power of attorney must be provided with
the post settlement request and the attorney
must be identified via one of our acceptable
Customer Identification methods.
Advice will be sought from Advantedge’s panel
lawyers on all post settlement requests signed
under power of attorney, and as a result, there
may be a delay in approving and processing
such requests.
Loan Repayment or Discharge
1. When a borrower or its properly
authorised representative requests full
repayment of the mortgage, you must
provide Advantedge with a completed Full
Discharge Authority Form.
2. Advantedge settlement agents will
be advised of the pending discharge;
Advantedge will provide an estimated
payout figure and request preparation of
discharge documents.
3. Advantedge will also provide the borrower’s
solicitor with an estimated payout figure
and the name of the appropriate person to
contact at Advantedge settlement agents.
4. Payout figures cannot be arranged using
StarNet.
5. Where an existing Advantedge loan is
being refinanced by a new Advantedge
application then Advantedge will take
action on the discharge request only when
it receives authorisation from the outgoing
Mortgage Manager/Broker, the borrower or
their legal representative.
6. Advantedge will instruct the file within
15 working days upon receipt the Discharge
Authority Form, or 15 working days prior
to the anticipated settlement date. For
example, if a request is received on
1 February for settlement to be completed
on 28 February, the request will not be
actioned until approximately 22 February.
7. In addition, Advantedge’s Trustee will take
3 working days to send the packet to our
settlement agents. Settlement bookings
will only take place once the packet is in
their possession.
8. The final payout figure will be provided
within 1 or 2 working days prior the actual
settlement date.
9. Request for Section 27 will be attended to
within 3 working days upon receipt of the
completed documents required.
Lending Guidelines Manual
5. No further financial information is required,
where the following criteria is met:
• Existing loan product, loan term, loan
purpose and loan account to remain
unchanged
• No increase to loan amount
• No deterioration in the lending category,
outside of Lending Category A to D;
or LMI is not required (refer to Lenders
Mortgage Insurance (LMI) or waiver
approval held from minimum Level 3
DCA Holder); or if LMI is currently held,
the LVR has not increased. (Exception: If
LMI is now required for account – refer to
point 6 below for instructions)
• The valuation report and residential
security type (including Term Deposits)
are acceptable; LVR policy requirements
are met (i.e.: Restricted and Inner-
City Postcodes)
Note: For existing loan accounts with LMI,
referral to LMI Provider will be required to
determine if additional premium is payable.
6. Where the loan amount is increased, or
LMI is now required, a full Credit Package
must be provided. The application will
be considered in the same manner as a
new loan.
Property Subdivision
1. Any proposed plan of subdivision must be
reviewed and approved by Advantedge
solicitors. Advantedge may request an
updated valuation of the security property,
which must take into consideration all the
effects of the proposed subdivision on the
Advantedge security property.
2. If, after the subdivision has occurred, a
portion of the security is to be sold, a
reduction to the loan amount may be
required by Advantedge.
3. After the subdivision has occurred, if the
security property remaining is vacant land
and loan is not re-documented, a Guide
to Construction Loans brochure must be
issued to the borrower.
Further Charges – Other Lenders
For Real property (Land) Mortgages,
completion of a title search is required to
be completed, when any extension of credit
request is requested.
This is to ensure any subsequent mortgages
lodged post Advantedge mortgage registration
are identified to enable appropriate Priority
Arrangements to be put in place and/or to
ensure an accurate calculation of the Bank
Value of the Security is reflected.
Advantedge must approve and consent to
any request for a further charge (second
or subsequent mortgage) over the security
property. Where applicable, a Lenders
mortgage insurance approval is required on
all subsequent charge requests. This approval
can only be obtained by Advantedge. Fees and
Charges may apply – refer to Fees and Charges
booklet for further details.
Deed of Priority
Advantedge must ensure that AFSH Nominees
Pty Ltd (applicable for loans submitted from
31 January 2011) or Perpetual Trustees Victoria
Limited (as mortgagee) is registered as first
mortgagee and as such cannot enter into any
deed of priority, which may alter that position.
When a borrower requests a loan from
Advantedge, and where there are existing
mortgages or charges on the title, Advantedge
will require the existing mortgagee to:
1. Execute a deed of priority in favour of
AFSH Nominees Pty Ltd (applicable for
loans submitted from 31 January 2011) or
Perpetual Trustees Victoria Limited; and
2. Lift its mortgage or charge, allow our
mortgage to be registered, and then re-
register its charge; or allow the registration
of a deed of postponement to re-arrange
the rank of the mortgages as per point (a)
above.
3. When an existing borrower requests
a variation to increase their loan
with Advantedge and where there
are subsequent charges on the title,
Advantedge will require the existing
subsequent mortgagees to execute a NEW
deed of priority in favour AFSH Nominees
Pty Ltd (applicable for loans submitted from
31 January 2011) or Perpetual Trustees
Victoria Limited.
Fees and Charges may apply – refer to Fees and
Charges booklet for further details.
Notice of Charge Received Prior to
Settlement
1. Advantedge Lending Services department
must be provided with details of the
proposed charge, including at least the
following information:
a) Details of the subsequent lender;
b) The amount of the further charge;
c) The term of the facility to be provided by
the other lender;
d) The repayment amounts and interest rate
applicable; and
e) Where possible, the purpose of the
advance.
2. Advantedge will arrange for the production
of the title documents to the appropriate
Advantedge settlement agent. A production
fee is payable.
3. The borrower’s solicitor or financier will
be advised by Advantedge of the consent,
and the name of the relevant Advantedge
settlement agent.
Notice of Charge Received Post
Settlement
1. Advantedge Customer Care must be
provided with details of the proposed
charge, including at least the following
information:
a) Details of the subsequent lender;
b) The amount of the further charge;
c) The term of the facility to be provided by
the other lender;
d) The repayment amounts and interest rate
applicable; and
e) Where possible, the purpose of the
advance.
2. Advantedge will arrange for the production
of the title documents to the appropriate
Advantedge settlement agent. A production
fee is applicable.
Post Settlement Requests and
Powers of Attorney
Where a post settlement request has been
signed under a power of attorney and
Advantedge does not already hold a copy of
the power of attorney on file, a copy of the
power of attorney must be provided with
the post settlement request and the attorney
must be identified via one of our acceptable
Customer Identification methods.
Advice will be sought from Advantedge’s panel
lawyers on all post settlement requests signed
under power of attorney, and as a result, there
may be a delay in approving and processing
such requests.
Loan Repayment or Discharge
1. When a borrower or its properly
authorised representative requests full
repayment of the mortgage, you must
provide Advantedge with a completed Full
Discharge Authority Form.
2. Advantedge settlement agents will
be advised of the pending discharge;
Advantedge will provide an estimated
payout figure and request preparation of
discharge documents.
3. Advantedge will also provide the borrower’s
solicitor with an estimated payout figure
and the name of the appropriate person to
contact at Advantedge settlement agents.
4. Payout figures cannot be arranged using
StarNet.
5. Where an existing Advantedge loan is
being refinanced by a new Advantedge
application then Advantedge will take
action on the discharge request only when
it receives authorisation from the outgoing
Mortgage Manager/Broker, the borrower or
their legal representative.
6. Advantedge will instruct the file within
15 working days upon receipt the Discharge
Authority Form, or 15 working days prior
to the anticipated settlement date. For
example, if a request is received on
1 February for settlement to be completed
on 28 February, the request will not be
actioned until approximately 22 February.
7. In addition, Advantedge’s Trustee will take
3 working days to send the packet to our
settlement agents. Settlement bookings
will only take place once the packet is in
their possession.
8. The final payout figure will be provided
within 1 or 2 working days prior the actual
settlement date.
9. Request for Section 27 will be attended to
within 3 working days upon receipt of the
completed documents required.
/ 31Advantedge | Lending Guidelines Manual Credit Policy and Process Guidelines
Lending Guidelines Manual
Discharge Calculations
1. Discharge figures prepared by Advantedge
Discharge department are subject to
change upon confirmation of the actual
settlement date.
2. The final repayment figure will include:
a) Repayments, if any, received after the
date of the initial notification;
b) Accrued interest charges;
c) Early Repayment Fees (if applicable);
d) Lender’s Administration Fee (if
applicable), and
e) Principal balance outstanding.
3. Advantedge will, at its discretion, deactivate
the borrower’s repayment arrangements
with its bank when the settlement date
and appropriate repayment figures have
been finalised. If there is any delay or the
discharge does not proceed Advantedge
should be advised immediately. Borrowers
will be expected to make up any
missed repayments.
Partial Release / Repayment –
Multiple Securities
Advantedge will perform an assessment at
the time of discharge and determine if funds
are required to reduce total loan limits to an
acceptable level.
Advantedge must be provided with the
following documents:
• Loan Variation form; AND
• A copy of the Contract of Sale for the
property being released
The customer’s request will advise if:
1. Full Funds are applied to reduce limits
2. Partial Funds are applied to reduce limits
1. Full Funds to Reduce Limits
Where customers are applying all sale proceeds
to the loan (i.e.: are not retaining any funds
from the sale) confirm all loans are in order and
there is no evidence of financial hardship.
2. Partial Funds
Where the customers wish to retain funds from
the sale of their property, Advantedge will:
• Order a valuation on any security which is
being retained (where existing valuation is
older than 12 months); and
• Confirm all loans have satisfactory
repayment history, and that there is no
indication of financial hardship.
LVR INCREASE AND LMI IS REQUIRED LVR IS THE SAME, OR REDUCES, OR HIGHER AND LMI IS
NOT REQUIRED
Advantedge will:
– Complete a new servicing assessment based on the updated
verification document/s provided; and
– Advise if additional funds need to be retained to evidence
serviceability; and
– Obtain Credit approval to release the property
Advantedge will:
– Confirm repayment history on all loans is satisfactory; and
– Obtain Credit approval to release the property
Where Lenders Mortgage Insurance is already held, Advantedge will obtain consent from its Lenders mortgage insurer.
Note: The request must be processed as a new loan where:
• Limit/s are required to be increased to allow the property to be released; or
• The LVR increases and it means LMI now applies
IMPORTANT
Where the loan has been in arrears, or the customer has answered ‘yes’ to ‘Possible Adverse changes to financial situation’ (section 3 of the loan
variation form). Advantedge will complete a new servicing assessment based on the updated verification document/s provided and obtain credit
approval to release the property
Lending Guidelines Manual
Discharge Calculations
1. Discharge figures prepared by Advantedge
Discharge department are subject to
change upon confirmation of the actual
settlement date.
2. The final repayment figure will include:
a) Repayments, if any, received after the
date of the initial notification;
b) Accrued interest charges;
c) Early Repayment Fees (if applicable);
d) Lender’s Administration Fee (if
applicable), and
e) Principal balance outstanding.
3. Advantedge will, at its discretion, deactivate
the borrower’s repayment arrangements
with its bank when the settlement date
and appropriate repayment figures have
been finalised. If there is any delay or the
discharge does not proceed Advantedge
should be advised immediately. Borrowers
will be expected to make up any
missed repayments.
Partial Release / Repayment –
Multiple Securities
Advantedge will perform an assessment at
the time of discharge and determine if funds
are required to reduce total loan limits to an
acceptable level.
Advantedge must be provided with the
following documents:
• Loan Variation form; AND
• A copy of the Contract of Sale for the
property being released
The customer’s request will advise if:
1. Full Funds are applied to reduce limits
2. Partial Funds are applied to reduce limits
1. Full Funds to Reduce Limits
Where customers are applying all sale proceeds
to the loan (i.e.: are not retaining any funds
from the sale) confirm all loans are in order and
there is no evidence of financial hardship.
2. Partial Funds
Where the customers wish to retain funds from
the sale of their property, Advantedge will:
• Order a valuation on any security which is
being retained (where existing valuation is
older than 12 months); and
• Confirm all loans have satisfactory
repayment history, and that there is no
indication of financial hardship.
LVR INCREASE AND LMI IS REQUIRED LVR IS THE SAME, OR REDUCES, OR HIGHER AND LMI IS
NOT REQUIRED
Advantedge will:
– Complete a new servicing assessment based on the updated
verification document/s provided; and
– Advise if additional funds need to be retained to evidence
serviceability; and
– Obtain Credit approval to release the property
Advantedge will:
– Confirm repayment history on all loans is satisfactory; and
– Obtain Credit approval to release the property
Where Lenders Mortgage Insurance is already held, Advantedge will obtain consent from its Lenders mortgage insurer.
Note: The request must be processed as a new loan where:
• Limit/s are required to be increased to allow the property to be released; or
• The LVR increases and it means LMI now applies
IMPORTANT
Where the loan has been in arrears, or the customer has answered ‘yes’ to ‘Possible Adverse changes to financial situation’ (section 3 of the loan
variation form). Advantedge will complete a new servicing assessment based on the updated verification document/s provided and obtain credit
approval to release the property
/ 32Lending Guidelines Manual
Advantedge Financial Services Pty Ltd (Advantedge) ACN 130 012 930 Australian Credit Licence 391202. Advantedge distributes and manages loans funded by
AFSH Nominees Pty Ltd ACN 143 937 437 Australian Credit Licence 391192 under the Advantedge Residential Loan Program. Each entity is a member of the
National Australia Bank Group. National Australia Bank Limited does not guarantee the obligations of its subsidiaries. A170225-0524
Advantedge Financial Services Pty Ltd (Advantedge) ACN 130 012 930 Australian Credit Licence 391202. Advantedge distributes and manages loans funded by
AFSH Nominees Pty Ltd ACN 143 937 437 Australian Credit Licence 391192 under the Advantedge Residential Loan Program. Each entity is a member of the
National Australia Bank Group. National Australia Bank Limited does not guarantee the obligations of its subsidiaries. A170225-0524